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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-K
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the fiscal year ended October 31, 2006
 Commission file number: 000-33385
 CALAVO GROWERS, INC.
 (Exact name of registrant as specified in its charter)
 California
    
    33-0945304(State of incorporation)
    
    (I.R.S. Employer Identification No.)1141-A Cummings Road, Santa Paula, CA
    
    93060(Address of principal executive offices)
    
    (Zip code)
 Registrants telephone number, including area code: (805) 525-1245
Securities registered pursuant to Section 12(b) of the Act:
 Common Stock, $0.001 Par Value per Share
 Securities registered pursuant to Section 12(g) of the Act: None
  o þ
  o þ
 þ o
 þ
  o þ o
  o þ
  Documents Incorporated by Reference




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TABLE OF CONTENTS  PART IItem 1. BusinessItem 1A. Risk FactorsItem 1B. Unresolved Staff CommentsItem 2. PropertiesItem 3. Legal ProceedingsItem 4. Submission of Matters to a Vote of Security HoldersPART IIItem 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity SecuritiesItem 6. Selected Financial DataItem 7. Managements Discussion and Analysis of Financial Condition and Results of OperationsItem 7A. Quantitative and Qualitative Disclosures About Market RiskItem 8. Financial Statements and Supplementary DataItem 9. Changes in and Disagreements with Accountants on Accounting and Financial DisclosureItem 9A. Controls and ProceduresItem 9B. Other InformationPART IIIItem 10. Directors and Executive Officers of the RegistrantItem 11. Executive CompensationItem 12. Security Ownership of Certain Beneficial Owners and ManagementItem 13. Certain Relationships and Related TransactionsItem 14. Principal Accountants Fees and ServicesPart IVItem 15. Exhibits and Financial Statement SchedulesSIGNATURESEXHIBIT INDEXEXHIBIT 10.14EXHIBIT 23.1EXHIBIT 23.2EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32    Table of Contents  CAUTIONARY STATEMENT
  2




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PART I
 
 Item 1. Business
 General development of the business
        3




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Available information
  Fresh products
       4




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
    
    We continue to have success with our ProRipeVIP avocado ripening program. This
proprietary program allows us to deliver avocados evenly ripened to our customers
specifications. We have invested in the Aweta AFS (acoustic firmness sensor) technology and
equipment. ProRipeVIP is the next generation of selling conditioned avocados that have
firmness determined via soundwaves. This technology is new to avocados. The most
significant and compelling reason we choose to invest in Aweta systems is because the
acoustic sensors measure firmness of the entire piece of fruit, as opposed to competitive
mechanical tests that use pressure and calculated averages to measure firmness. We believe
that ripened avocados help our customers address the consumers immediate needs and
accelerate the sale of avocados through their stores. We currently have three Aweta systems
in use in the United States, which, we believe, can effectively meet our customers demand
for conditioned fruit.
    
    We have developed various display techniques and packages that appeal to consumers and,
in particular, impulse buyers. Some of our techniques include the bagging of avocados and
the strategic display of the bags within the produce section of retail stores. Our research
has demonstrated that consumers generally purchase a larger quantity of avocados when
presented in a bag as opposed to the conventional bulk displays. We also believe that the
value proposition of avocados in a bag provides for a higher level of sales to grocery
stores.
    
    From time to time, we market our avocados under joint promotion programs with other food
manufacturers. Under these programs, we seek to increase the promotional exposure of our
products by providing certain sales incentives. These incentives will be offered in
conjunction with various promotional campaigns designed to advertise the products of all
parties involved. We believe these programs will help us minimize our advertising costs, as
they will be shared with other parties, while still achieving recognition in the
marketplace.
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th st
   Processed Products
       6




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Sales and Other Financial Information by Business Segment and Product Category
  Patents and Trademarks
  Working Capital Requirements
    Backlog
  Research and Development
  Compliance with Government Regulations
  7




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Employees
   Location
    
    Salaried
    
    HourlyUnited States
    
    
    95
    
    
    
    135Mexico
    
    
    54
    
    
    
    466TOTAL
    
    
    149
    
    
    
    601
  
 Item 1A. Risk Factors
 Risks Related to Our Business
 We are subject to increasing competition that may adversely affect our operating results.
  
    
    California avocados are impacted by an increasing volume of foreign grown avocados being
imported into the United States. Recently, there have been significant plantings of
avocados in Mexico, Chile, New Zealand, the Dominican Republic, and other parts of the
world, which have had, and will continue to have, the effect of increasing the volume of
foreign grown avocados entering the United States market. Generally, an increase in foreign
grown avocados in the markets we distribute in has the effect of lowering prices for
California grown avocados and adversely impacting our results from operations.
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##### Table of Contents




    
    California avocado are subject to competition from other California avocado handlers. If
we are unable to consistently pay California growers a competitive price for their avocados,
these growers may choose to have their avocados marketed by alternate handlers.
    
    Non-California sourced avocados and perishable food products are impacted by competitors
operating in Mexico. Generally, handlers of Mexican grown avocados operate facilities that
are substantially smaller than our facility in Uruapan, Mexico. If we are unable to pack
and market a sufficient volume of Mexican grown avocados, smaller handlers will have a lower
per unit cost and be able to offer Mexican avocados at a more competitive price to our
customers.
    
    Non-California sourced avocados and perishable food products are also subject to
competition from other California avocado handlers that market Chilean grown avocados. If
we are unable to consistently pay Chilean packers a competitive price for their avocados,
these packers may choose to have their avocados marketed by alternate handlers.
 We are subject to the risks of doing business internationally.
   
    
    Local economic and political conditions, including disruptions in trading and capital
markets;
    
    Restrictive foreign governmental actions, such as restrictions on transfers of funds and
trade protection measures, including export duties and quotas and customs duties and
tariffs;
    
    Changes in legal or regulatory requirements affecting foreign investment, loans, taxes,
imports, and exports; and
    
    Currency exchange rate fluctuations which, 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.
 We and our growers are subject to the risks that are inherent in farming.
  We are subject to rapidly changing USDA and FDA regulations which govern the importation of foreign
avocados into the United States and the processing of processed avocado products.
   Our business could be adversely affected if we lost key members of our management.
  The acquisition of other businesses could pose risks to our operating income.
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Our ability to competitively serve our customers is a function of reliable and low cost
transportation. Disruption of the supply of these services and/or significant increases in the cost
of these services could impact our operating income.
  
 Item 1B. Unresolved Staff Comments
  
 Item 2. Properties
         
 Item 3. Legal Proceedings
  10




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Item 4. Submission of Matters to a Vote of Security Holders
  Executive Officers
  Name
    
    Age
    
    PositionLecil E. Cole
    
    
    66
    
    
    Chairman of the Board, Chief Executive Officer and PresidentArthur J. Bruno
    
    
    56
    
    
    Chief Operating Officer, Chief Financial Officer and Corporate SecretaryRobert J. Wedin
    
    
    57
    
    
    Vice President, Sales and Fresh MarketingAlan C. Ahmer
    
    
    58
    
    
    Vice President, Processed Product Sales and ProductionMichael A. Browne
    
    
    47
    
    
    Vice President, Fresh Operations
 Lecil E. Cole
 Arthur J. Bruno
 Robert J. Wedin
 Alan C. Ahmer
 Michael A. Browne
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PART II
 
 Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
   Fiscal 2006
    
    High
    
    LowFirst Quarter
    
    $
    10.50
    
    
    $
    9.59Second Quarter
    
    $
    11.00
    
    
    $
    9.51Third Quarter
    
    $
    11.94
    
    
    $
    9.37Fourth Quarter
    
    $
    10.24
    
    
    $
    9.04
 Fiscal 2005
    
    High
    
    LowFirst Quarter
    
    $
    12.38
    
    
    $
    10.10Second Quarter
    
    $
    11.81
    
    
    $
    9.76Third Quarter
    
    $
    10.92
    
    
    $
    10.00Fourth Quarter
    
    $
    10.25
    
    
    $
    8.66
   Dividend Policy
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Item 6. Selected Financial Data
 SELECTED CONSOLIDATED FINANCIAL DATA
   Fiscal Year Ended October 31, 20052006
    
    2005
    
    2004
    
    2003
    
    2002(In thousands, except per share data)Income Statement Data: (1)Net sales
    
    $
    273,910
    
    
    $
    258,822
    
    
    $
    274,218
    
    
    $
    246,761
    
    
    $
    242,671Gross margin
    
    
    29,271
    
    
    
    21,734
    
    
    
    25,404
    
    
    
    25,465
    
    
    
    25,823Net income
    
    
    5,788
    
    
    
    3,322
    
    
    
    6,210
    
    
    
    7,160
    
    
    
    6,915Basic and diluted net income per share
    
    $
    0.40
    
    
    $
    0.24
    
    
    $
    0.46
    
    
    $
    0.55
    
    
    $
    0.60Balance Sheet Data as of End of
Period:Working capital
    
    $
    12,023
    
    
    $
    17,618
    
    
    $
    20,353
    
    
    $
    20,735
    
    
    $
    18,833Total assets(4)
    
    
    107,494
    
    
    
    108,482
    
    
    
    67,398
    
    
    
    53,689
    
    
    
    55,132Short-term debt(4)
    
    
    1,308
    
    
    
    1,313
    
    
    
    22
    
    
    
    24
    
    
    
    3,222Long-term debt, less current portion(2)(4)
    
    
    10,406
    
    
    
    11,719
    
    
    
    34
    
    
    
    61
    
    
    
    3,180Shareholders equity(4)
    
    
    58,943
    
    
    
    64,746
    
    
    
    43,937
    
    
    
    37,147
    
    
    
    30,556Cash Flows Provided by (Used in):Operations
    
    $
    7,819
    
    
    $
    5,568
    
    
    $
    4,460
    
    
    $
    15,222
    
    
    $
    8,135Investing(3)(4)
    
    
    (4,663
    )
    
    
    (11,941
    )
    
    
    (8,474
    )
    
    
    (4,475
    )
    
    
    (2,078
    )Financing(4)
    
    
    (4,239
    )
    
    
    6,870
    
    
    
    (725
    )
    
    
    (6,293
    )
    
    
    (7,193
    )Other Data:Dividends per share
    
    $
    0.32
    
    
    $
    0.32
    
    
    $
    0.30
    
    
    $
    0.25
    
    
    $
    0.20Net book value per share
    
    $
    4.12
    
    
    $
    4.51
    
    
    $
    3.25
    
    
    $
    2.87
    
    
    $
    2.38Pounds of California avocados sold
    
    
    218,460
    
    
    
    104,950
    
    
    
    152,725
    
    
    
    122,950
    
    
    
    158,187Pounds of non-California avocados sold
    
    
    70,063
    
    
    
    103,830
    
    
    
    69,410
    
    
    
    70,348
    
    
    
    69,512Pounds of processed avocados products sold
    
    
    20,489
    
    
    
    15,628
    
    
    
    13,317
    
    
    
    14,707
    
    
    
    14,248
 
 (1)
    
    Operating results for fiscal years 2006, 2005, and 2004 include the acquisition of Maui Fresh
International, Inc. For fiscal years 2006, 2005, and 2004, Mauis net sales, gross margins,
and net income were as follows: (2006) $22.1 million, $1.4 million, and $0.2 million, (2005)
$21.7 million, $1.1 million, and $0.4 million, and (2004) $19.8 million, $1.4 million, and
$0.5 million.(2)
    
    In July 2003, our Board of Directors approved the retirement of our Industrial Development
Revenue Bond. The bonds were initially floated to provide the financing to construct our
Temecula, California packinghouse. We repaid the final $2.8 million in principal under the
indenture in September 2003.(3)
    
    Cash flows used in investing activities for fiscal 2004 and 2003 include the effect of
constructing a processing facility in Uruapan, Michoacan, Mexico. The Uruapan facility
commenced operations in February 2004.(4)
    
    Total assets, short-term debt, long-term debt, equity, cash flows used in investing
activities, and cash flows provided by financing activities for fiscal 2005 include the effect
of the stock purchase agreement with Limoneira Company. See Note 12 to the consolidated
financial statements. 
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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 Selected Consolidated Financial Data and our consolidated financial
statements and notes thereto that appear elsewhere in this Annual Report. This discussion and
analysis contains forward-looking statements that involve risks, uncertainties, and assumptions.
Actual results may differ materially from those anticipated in these forward-looking statements as
a result of various factors, including, but not limited to, those presented under Risks related to
our business included in Item 1A and elsewhere in this Annual Report.
 Overview
 Disclosures about
Segments of an Enterprise and Related Information
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Recent Developments
 Dividend Payment
  Short-term borrowings
  Retirement of Common Stock
  Operating Lease
 TM
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Critical Accounting Estimates
    Promotional allowances .
 Income Taxes .
 Goodwill and acquired intangible assets Goodwill and Other Intangible Assets
 Allowance for accounts receivable
 Revenue recognition.
 16




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Results of Operations
  Year ended October 31,2006
    
    2005
    
    2004Net sales
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Gross margins
    
    
    10.7
    %
    
    
    8.4
    %
    
    
    9.3
    %Selling, general and administrative
    
    
    7.3
    %
    
    
    7.2
    %
    
    
    5.8
    %Operating income
    
    
    3.4
    %
    
    
    1.2
    %
    
    
    3.4
    %Interest Income
    
    
    0.1
    %
    
    
    0.1
    %
    
    
    0.1
    %Interest Expense
    
    
    (0.3
    )%
    
    
    (0.2
    )%
    
    
    0.0
    %Other income, net
    
    
    0.2
    %
    
    
    0.9
    %
    
    
    0.1
    %Net income
    
    
    2.1
    %
    
    
    1.3
    %
    
    
    2.3
    %
 Net Sales
   2006
    
    
    Change
    
    
    2005
    
    
    Change
    
    
    2004(Dollars in thousands)Net sales:Fresh products
    
    $
    236,889
    
    
    
    2.9
    %
    
    $
    230,289
    
    
    
    (7.4
    )%
    
    $
    248,562Processed products
    
    
    37,021
    
    
    
    29.7
    %
    
    
    28,533
    
    
    
    11.2
    %
    
    
    25,656Total net sales
    
    $
    273,910
    
    
    
    5.8
    %
    
    $
    258,822
    
    
    
    (5.6
    )%
    
    $
    274,218As a percentage of net sales:Fresh products
    
    
    86.5
    %
    
    
    
    
    
    
    89.0
    %
    
    
    
    
    
    
    90.6
    %Processed products
    
    
    13.5
    %
    
    
    
    
    
    
    11.0
    %
    
    
    
    
    
    
    9.4
    %100.0
    %
    
    
    
    
    
    
    100.0
    %
    
    
    
    
    
    
    100.0
    %
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Year ended October 31, 2006
    
    
    Year ended October 31, 2005Fresh
    
    
    Processed
    
    
    
    
    
    
    Fresh
    
    
    Processedproducts
    
    
    products
    
    
    Total
    
    
    products
    
    
    products
    
    
    TotalThird-party sales:California avocados
    
    $
    140,995
    
    
    $
    
    
    
    $
    140,995
    
    
    $
    104,481
    
    
    $
    
    
    
    $
    104,481Imported avocados
    
    
    51,211
    
    
    
    
    
    
    
    51,211
    
    
    
    81,756
    
    
    
    
    
    
    
    81,756Papayas
    
    
    4,811
    
    
    
    
    
    
    
    4,811
    
    
    
    6,251
    
    
    
    
    
    
    
    6,251Specialities and tropicals
    
    
    9,724
    
    
    
    
    
    
    
    9,724
    
    
    
    13,777
    
    
    
    
    
    
    
    13,777Processed  food service
    
    
    
    
    
    
    34,021
    
    
    
    34,021
    
    
    
    
    
    
    
    28,307
    
    
    
    28,307Processed  retail and club
    
    
    
    
    
    
    10,454
    
    
    
    10,454
    
    
    
    
    
    
    
    6,766
    
    
    
    6,766Total fruit and product sales
to third-parties
    
    
    206,741
    
    
    
    44,475
    
    
    
    251,216
    
    
    
    206,265
    
    
    
    35,073
    
    
    
    241,338Freight and other charges
    
    
    30,156
    
    
    
    637
    
    
    
    30,793
    
    
    
    24,129
    
    
    
    258
    
    
    
    24,387Total gross sales to third-parties
    
    
    236,897
    
    
    
    45,112
    
    
    
    282,009
    
    
    
    230,394
    
    
    
    35,331
    
    
    
    265,725Less sales incentives
    
    
    (8
    )
    
    
    (8,091
    )
    
    
    (8,099
    )
    
    
    (105
    )
    
    
    (6,798
    )
    
    
    (6,903
    )Total net sales to third-parties
    
    
    236,889
    
    
    
    37,021
    
    
    
    273,910
    
    
    
    230,289
    
    
    
    28,533
    
    
    
    258,822Intercompany sales
    
    
    9,532
    
    
    
    6,227
    
    
    
    15,759
    
    
    
    15,850
    
    
    
    6,166
    
    
    
    22,016Net sales
    
    $
    246,421
    
    
    $
    43,248
    
    
    
    289,669
    
    
    $
    246,139
    
    
    $
    34,699
    
    
    
    280,838Intercompany sales eliminations
    
    
    
    
    
    
    
    
    
    
    (15,759
    )
    
    
    
    
    
    
    
    
    
    
    (22,016
    )Consolidated net sales
    
    
    
    
    
    
    
    
    
    $
    273,910
    
    
    
    
    
    
    
    
    
    
    $
    258,822
 Year ended October 31, 2005
    
    
    Year ended October 31, 2004Fresh
    
    
    Processed
    
    
    
    
    
    
    Fresh
    
    
    Processedproducts
    
    
    products
    
    
    Total
    
    
    products
    
    
    products
    
    
    TotalThird-party sales:California avocados
    
    $
    104,481
    
    
    $
    
    
    
    $
    104,481
    
    
    $
    150,159
    
    
    $
    
    
    
    $
    150,159Imported avocados
    
    
    81,756
    
    
    
    
    
    
    
    81,756
    
    
    
    54,589
    
    
    
    
    
    
    
    54,589Papayas
    
    
    6,251
    
    
    
    
    
    
    
    6,251
    
    
    
    6,846
    
    
    
    
    
    
    
    6,846Specialities and tropicals
    
    
    13,777
    
    
    
    
    
    
    
    13,777
    
    
    
    14,233
    
    
    
    
    
    
    
    14,233Processed  food service
    
    
    
    
    
    
    28,307
    
    
    
    28,307
    
    
    
    
    
    
    
    27,352
    
    
    
    27,352Processed  retail and club
    
    
    
    
    
    
    6,766
    
    
    
    6,766
    
    
    
    
    
    
    
    4,285
    
    
    
    4,285Total fruit and product sales
to third-parties
    
    
    206,265
    
    
    
    35,073
    
    
    
    241,338
    
    
    
    225,827
    
    
    
    31,637
    
    
    
    257,464Freight and other charges
    
    
    24,129
    
    
    
    258
    
    
    
    24,387
    
    
    
    22,914
    
    
    
    534
    
    
    
    23,448Total gross sales to third-parties
    
    
    230,394
    
    
    
    35,331
    
    
    
    265,725
    
    
    
    248,741
    
    
    
    32,171
    
    
    
    280,912Less sales incentives
    
    
    (105
    )
    
    
    (6,798
    )
    
    
    (6,903
    )
    
    
    (179
    )
    
    
    (6,515
    )
    
    
    (6,694
    )Total net sales to third-parties
    
    
    230,289
    
    
    
    28,533
    
    
    
    258,822
    
    
    
    248,562
    
    
    
    25,656
    
    
    
    274,218Intercompany sales
    
    
    15,850
    
    
    
    6,166
    
    
    
    22,016
    
    
    
    9,347
    
    
    
    7,093
    
    
    
    16,440Net sales
    
    $
    246,139
    
    
    $
    34,699
    
    
    
    280,838
    
    
    $
    257,909
    
    
    $
    32,749
    
    
    
    290,658Intercompany sales eliminations
    
    
    
    
    
    
    
    
    
    
    (22,016
    )
    
    
    
    
    
    
    
    
    
    
    (16,440
    )Consolidated net sales
    
    
    
    
    
    
    
    
    
    $
    258,822
    
    
    
    
    
    
    
    
    
    
    $
    274,218
  Fresh Products
      18




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Processed Products
   19




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Gross Margins
  2006
    
    
    Change
    
    
    2005
    
    
    Change
    
    
    2004(Dollars in thousands)Gross Margins:Fresh products
    
    $
    18,673
    
    
    
    9.4
    %
    
    $
    17,071
    
    
    
    (22.6
    )%
    
    $
    22,060Processed products
    
    
    10,598
    
    
    
    127.3
    %
    
    
    4,663
    
    
    
    39.4
    %
    
    
    3,344Total gross margins
    
    $
    29,271
    
    
    
    34.7
    %
    
    $
    21,734
    
    
    
    (14.4
    )%
    
    $
    25,404Gross profit percentages:Fresh products
    
    
    7.9
    %
    
    
    
    
    
    
    7.4
    %
    
    
    
    
    
    
    8.9
    %Processed products
    
    
    28.6
    %
    
    
    
    
    
    
    16.3
    %
    
    
    
    
    
    
    13.0
    %Consolidated
    
    
    10.7
    %
    
    
    
    
    
    
    8.4
    %
    
    
    
    
    
    
    9.3
    %
 
     20




---



##### Table of Contents



Selling, General and Administrative
 2006
    
    Change
    
    2005
    
    Change
    
    2004(Dollars in thousands)Selling, general and administrative
    
    $
    19,954
    
    
    
    7.3
    %
    
    $
    18,588
    
    
    
    16.8
    %
    
    $
    15,920Percentage of net sales
    
    
    7.3
    %
    
    
    
    
    
    
    7.2
    %
    
    
    
    
    
    
    5.8
    %
 
   Interest income
 2006
    
    Change
    
    2005
    
    Change
    
    2004(Dollars in thousands)Interest income
    
    $
    356
    
    
    
    2.3
    %
    
    $
    348
    
    
    
    (10.3
    )%
    
    $
    388Percentage of net sales
    
    
    0.1
    %
    
    
    
    
    
    
    0.1
    %
    
    
    
    
    
    
    0.1
    %
 
  21




---



##### Table of Contents



Interest expense
 2006
    
    Change
    
    2005
    
    Change
    
    2004(Dollars in thousands)Interest expense
    
    $
    (943
    )
    
    
    136.3
    %
    
    $
    (399
    )
    
    
    504.5
    %
    
    $
    (66
    )Percentage of net sales
    
    
    (0.3
    )%
    
    
    
    
    
    
    (0.2
    )%
    
    
    
    
    
    
    0.0
    %
 
  Other Income, Net
 2006
    
    Change
    
    2005
    
    Change
    
    2004(Dollars in thousands)Other income, net
    
    $
    599
    
    
    
    (75.1
    )%
    
    $
    2,408
    
    
    
    1,443.6
    %
    
    $
    156Percentage of net sales
    
    
    0.2
    %
    
    
    
    
    
    
    0.9
    %
    
    
    
    
    
    
    0.1
    %
 
  Provision for Income Taxes
 2006
    
    Change
    
    2005
    
    Change
    
    2004(Dollars in thousands)Provision for income taxes
    
    $
    3,620
    
    
    
    66.0
    %
    
    $
    2,181
    
    
    
    (38.9
    )%
    
    $
    3,567Percentage of income before
provision for income taxes
    
    
    38.5
    %
    
    
    
    
    
    
    39.6
    %
    
    
    
    
    
    
    36.5
    %
 
  22




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##### Table of Contents



Quarterly Results of Operations
  Three months endedOct. 31,
    
    
    July 31,
    
    
    Apr. 30,
    
    
    Jan. 31,
    
    
    Oct. 31,
    
    
    July 31,
    
    
    Apr. 30,
    
    
    Jan. 31,2006
    
    
    2006
    
    
    2006
    
    
    2006
    
    
    2005
    
    
    2005
    
    
    2005
    
    
    2005(in thousands, except per share amounts)Statement of Operations DataNet sales
    
    $
    76,880
    
    
    $
    78,954
    
    
    $
    67,429
    
    
    $
    50,647
    
    
    $
    62,246
    
    
    $
    88,699
    
    
    $
    60,206
    
    
    $
    47,671Cost of sales
    
    
    69,896
    
    
    
    68,738
    
    
    
    58,768
    
    
    
    47,237
    
    
    
    58,013
    
    
    
    79,505
    
    
    
    53,851
    
    
    
    45,719Gross margin
    
    
    6,984
    
    
    
    10,216
    
    
    
    8,661
    
    
    
    3,410
    
    
    
    4,233
    
    
    
    9,194
    
    
    
    6,355
    
    
    
    1,952Selling, general and administrative
    
    
    5,163
    
    
    
    5,284
    
    
    
    5,063
    
    
    
    4,444
    
    
    
    4,943
    
    
    
    4,825
    
    
    
    4,307
    
    
    
    4,513Operating income (loss)
    
    
    1,821
    
    
    
    4,932
    
    
    
    3,598
    
    
    
    (1,034
    )
    
    
    (710
    )
    
    
    4,369
    
    
    
    2,048
    
    
    
    (2,561
    )Other income (expense), net
    
    
    292
    
    
    
    (136
    )
    
    
    10
    
    
    
    (75
    )
    
    
    213
    
    
    
    153
    
    
    
    1,909
    
    
    
    82Income before provision (benefit)
for income taxes
    
    
    2,113
    
    
    
    4,796
    
    
    
    3,608
    
    
    
    (1,109
    )
    
    
    (497
    )
    
    
    4,522
    
    
    
    3,957
    
    
    
    (2,479
    )Provision (benefit) for income taxes
    
    
    775
    
    
    
    1,870
    
    
    
    1,419
    
    
    
    (444
    )
    
    
    20
    
    
    
    1,603
    
    
    
    1,490
    
    
    
    (932
    )Net income (loss)
    
    $
    1,338
    
    
    $
    2,926
    
    
    $
    2,189
    
    
    $
    (665
    )
    
    $
    (517
    )
    
    $
    2,919
    
    
    $
    2,467
    
    
    $
    (1,547
    )Net income (loss) per share:Basic
    
    $
    0.09
    
    
    $
    0.21
    
    
    $
    0.15
    
    
    $
    (0.05
    )
    
    $
    (0.04
    )
    
    $
    0.21
    
    
    $
    0.18
    
    
    $
    (0.11
    )Diluted
    
    $
    0.09
    
    
    $
    0.21
    
    
    $
    0.15
    
    
    $
    (0.05
    )
    
    $
    (0.04
    )
    
    $
    0.21
    
    
    $
    0.18
    
    
    $
    (0.11
    )Number of shares used in per share
computation:Basic
    
    
    14,292
    
    
    
    14,171
    
    
    
    14,282
    
    
    
    14,352
    
    
    
    14,371
    
    
    
    14,171
    
    
    
    13,507
    
    
    
    13,507Diluted
    
    
    14,319
    
    
    
    14,237
    
    
    
    14,343
    
    
    
    14,352
    
    
    
    14,371
    
    
    
    14,237
    
    
    
    13,580
    
    
    
    13,507
 Liquidity and Capital Resources
       23




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##### Table of Contents



Payments due by periodContractual Obligations
    
    Total
    
    
    Less than 1 year
    
    
    1-3 years
    
    
    4-5 years
    
    
    More than 5 yearsLong-term debt obligations
(including interest)
    
    $
    12,381
    
    
    $
    1,382
    
    
    $
    4,128
    
    
    $
    2,748
    
    
    $
    4,123Short-term borrowings
    
    
    3,804
    
    
    
    3,804
    
    
    
    
    
    
    
    
    
    
    
    Defined benefit plan
    
    
    414
    
    
    
    47
    
    
    
    141
    
    
    
    94
    
    
    
    132Operating lease commitments
    
    
    5,670
    
    
    
    1,279
    
    
    
    1,638
    
    
    
    746
    
    
    
    2,007Total
    
    $
    22,269
    
    
    $
    6,512
    
    
    $
    5,907
    
    
    $
    3,588
    
    
    $
    6,262
    Impact of Recently Issued Accounting Pronouncements
  24




---



##### Table of Contents



Item 7A. Quantitative and Qualitative Disclosures About Market Risk
  (All amounts in thousands)
    
    Expected maturity date October 31,2007
    
    2008
    
    2009
    
    2010
    
    2011
    
    Thereafter
    
    Total
    
    Fair ValueAssetsCash and cash equivalents (1)
    
    $
    50
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    50
    
    
    $
    50Accounts receivable (1)
    
    
    24,202
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    24,202
    
    
    
    24,202Notes receivable from shareholders (2)
    
    
    2,430
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,430
    
    
    
    2,278LiabilitiesPayable to growers (1)
    
    $
    6,334
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    6,334
    
    
    $
    6,334Accounts payable (1)
    
    
    4,046
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,046
    
    
    
    4,046Current borrowings pursuant to credit
facilities (1)
    
    
    3,804
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,804
    
    
    
    3,804Fixed-rate long-term obligations (3)
    
    
    1,308
    
    
    
    1,306
    
    
    
    1,300
    
    
    
    1,300
    
    
    
    1,300
    
    
    
    5,200
    
    
    
    11,714
    
    
    
    10,768
 
 (1)
    
    We believe the carrying amounts of cash and cash equivalents, accounts receivable,
payable to growers, accounts payable, and current borrowings pursuant to credit facilities
approximate their fair value due to the short maturity of these financial instruments.(2)
    
    Notes receivable from shareholders bear interest at 7.0%. We believe that a portfolio
of loans with a similar risk profile would currently yield a return of 9.25%. We project
the impact of an increase or decrease in interest rates of 100 basis points would result in
a change of fair value of approximately $40,000.(3)
    
    Fixed-rate long-term obligations bear interest rates ranging from 3.3% to 5.7% with a
weighted-average interest rate of 5.7%. We believe that loans with a similar risk profile
would currently yield a return of 7.7%. We project the impact of an increase or decrease
in interest rates of 100 basis points would result in a change of fair value of
approximately $434,000.   25




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##### Table of Contents



Item 8. Financial Statements and Supplementary Data
 CALAVO GROWERS, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
 October 31,2006
    
    
    2005AssetsCurrent assets:Cash and cash equivalents
    
    $
    50
    
    
    $
    1,133Accounts receivable, net of allowances
of $1,833 (2006) and $2,688 (2005)
    
    
    24,202
    
    
    
    19,253Inventories, net
    
    
    10,569
    
    
    
    10,096Prepaid expenses and other current assets
    
    
    4,934
    
    
    
    5,879Advances to suppliers
    
    
    1,406
    
    
    
    1,141Income taxes receivable
    
    
    2,268
    
    
    
    893Deferred income taxes
    
    
    2,348
    
    
    
    2,651Total current assets
    
    
    45,777
    
    
    
    41,046Property, plant, and equipment, net
    
    
    19,908
    
    
    
    16,897Investment in Limoneira
    
    
    33,879
    
    
    
    45,634Investment in Maui Fresh, LLC
    
    
    229
    
    
    
    Goodwill
    
    
    3,591
    
    
    
    3,591Other assets
    
    
    4,110
    
    
    
    1,314$
    107,494
    
    
    $
    108,482Liabilities and shareholders equityCurrent liabilities:Payable to growers
    
    $
    6,334
    
    
    $
    1,753Trade accounts payable
    
    
    4,046
    
    
    
    1,892Accrued expenses
    
    
    13,689
    
    
    
    12,482Short-term borrowings
    
    
    3,804
    
    
    
    1,424Dividend payable
    
    
    4,573
    
    
    
    4,564Current portion of long-term obligations
    
    
    1,308
    
    
    
    1,313Total current liabilities
    
    
    33,754
    
    
    
    23,428Long-term liabilities:Long-term obligations, less current portion
    
    
    10,406
    
    
    
    11,719Deferred income taxes
    
    
    4,391
    
    
    
    8,589Total long-term liabilities
    
    
    14,797
    
    
    
    20,308Commitments and contingencies (Note 8)Shareholders equity:Common stock ($0.001 par value, 100,000 shares
authorized; 14,293 and 14,362 shares outstanding
at October 31, 2006 and 2005)
    
    
    14
    
    
    
    14Additional paid-in capital
    
    
    37,109
    
    
    
    37,240Notes receivable from shareholders
    
    
    (2,430
    )
    
    
    (2,636
    )Accumulated other comprehensive income
    
    
    6,293
    
    
    
    13,386Retained earnings
    
    
    17,957
    
    
    
    16,742Total shareholders equity
    
    
    58,943
    
    
    
    64,746$
    107,494
    
    
    $
    108,482
 See accompanying notes to consolidated financial statements.
 26




---



##### Table of Contents



CALAVO GROWERS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
 Year Ended October 31,2006
    
    
    2005
    
    
    2004Net sales
    
    $
    273,910
    
    
    $
    258,822
    
    
    $
    274,218Cost of sales
    
    
    244,639
    
    
    
    237,088
    
    
    
    248,814Gross margin
    
    
    29,271
    
    
    
    21,734
    
    
    
    25,404Selling, general and administrative
    
    
    19,954
    
    
    
    18,588
    
    
    
    15,920Restructuring charge
    
    
    
    
    
    
    
    
    
    
    185Operating income
    
    
    9,317
    
    
    
    3,146
    
    
    
    9,299Equity in earnings from Maui Fresh, LLC
    
    
    79
    
    
    
    
    
    
    
    Interest income
    
    
    356
    
    
    
    348
    
    
    
    388Interest expense
    
    
    (943
    )
    
    
    (399
    )
    
    
    (66
    )Other income, net
    
    
    599
    
    
    
    2,408
    
    
    
    156Income before provision for income taxes
    
    
    9,408
    
    
    
    5,503
    
    
    
    9,777Provision for income taxes
    
    
    3,620
    
    
    
    2,181
    
    
    
    3,567Net income
    
    $
    5,788
    
    
    $
    3,322
    
    
    $
    6,210Net income per share:Basic
    
    $
    0.40
    
    
    $
    0.24
    
    
    $
    0.46Diluted
    
    $
    0.40
    
    
    $
    0.24
    
    
    $
    0.46Number of shares used in per share computation:Basic
    
    
    14,304
    
    
    
    13,892
    
    
    
    13,497Diluted
    
    
    14,354
    
    
    
    13,985
    
    
    
    13,582
 See accompanying notes to consolidated financial statements.
 27




---



##### Table of Contents



CALAVO GROWERS, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(All amounts in thousands)
 Year endedOctober 31,2006
    
    
    2005
    
    
    2004Net income
    
    $
    5,788
    
    
    $
    3,322
    
    
    $
    6,210Other comprehensive income (loss), before tax:Unrealized holding gains (losses) arising during period
    
    
    (11,755
    )
    
    
    22,184
    
    
    
    Income tax (expense) benefit related to items of other
comprehensive income (loss)
    
    
    4,662
    
    
    
    (8,798
    )
    
    
    Other comprehensive income (loss), net of tax
    
    
    (7,093
    )
    
    
    13,386
    
    
    
    Comprehensive income (loss)
    
    $
    (1,305
    )
    
    $
    16,708
    
    
    $
    6,210
 See accompanying notes to consolidated financial statements.
 28




---



##### Table of Contents



CALAVO GROWERS, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
(in thousands)
 Notes
    
    
    AccumulatedAdditional
    
    
    Receivable
    
    
    OtherCommon Stock
    
    
    Paid-in
    
    
    From
    
    
    Comprehensive
    
    
    RetainedShares
    
    
    Amount
    
    
    Capital
    
    
    Shareholders
    
    
    Income
    
    
    Earnings
    
    
    TotalBalance, October 31, 2003
    
    
    12,930
    
    
    $
    13
    
    
    $
    24,727
    
    
    $
    (3,563
    )
    
    $
    
    
    
    $
    15,970
    
    
    $
    37,147Purchase acquisition
    
    
    577
    
    
    
    1
    
    
    
    4,049
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,050Stock compensation expense
    
    
    
    
    
    
    
    
    
    
    46
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    46Collections on shareholder notes receivable
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    680
    
    
    
    
    
    
    
    
    
    
    
    680Dividend declared to shareholders
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,196
    )
    
    
    (4,196
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,210
    
    
    
    6,210Balance, October 31, 2004
    
    
    13,507
    
    
    
    14
    
    
    
    28,822
    
    
    
    (2,883
    )
    
    
    
    
    
    
    17,984
    
    
    
    43,937Exercise of stock options and
income tax benefit of $59
    
    
    55
    
    
    
    
    
    
    
    334
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    334Stock compensation expense
    
    
    
    
    
    
    
    
    
    
    84
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    84Issuance of stock to Limoneira
    
    
    1,000
    
    
    
    1
    
    
    
    9,999
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,000Unrealized gain on Limoneira investment,
net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,386
    
    
    
    
    
    
    
    13,386Retirement of common stock
    
    
    (200
    )
    
    
    (1
    )
    
    
    (1,999
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,000
    )Collections on shareholder notes receivable
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    247
    
    
    
    
    
    
    
    
    
    
    
    247Dividend declared to shareholders
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,564
    )
    
    
    (4,564
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,322
    
    
    
    3,322Balance, October 31, 2005
    
    
    14,362
    
    
    
    14
    
    
    
    37,240
    
    
    
    (2,636
    )
    
    
    13,386
    
    
    
    16,742
    
    
    
    64,746Exercise of stock options and
income tax benefit of $146
    
    
    51
    
    
    
    
    
    
    
    403
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    403Stock compensation expense
    
    
    
    
    
    
    
    
    
    
    666
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    666Unrealized loss on Limoneira investment,
net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,093
    )
    
    
    
    
    
    
    (7,093
    )Retirement of common stock
    
    
    (120
    )
    
    
    
    
    
    
    (1,200
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,200
    )Collections on shareholder notes receivable
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    206
    
    
    
    
    
    
    
    
    
    
    
    206Dividend declared to shareholders
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,573
    )
    
    
    (4,573
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,788
    
    
    
    5,788Balance, October 31, 2006
    
    
    14,293
    
    
    $
    14
    
    
    $
    37,109
    
    
    $
    (2,430
    )
    
    $
    6,293
    
    
    $
    17,957
    
    
    $
    58,943
 See accompanying notes to consolidated financial statements.
 29




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##### Table of Contents



CALAVO GROWERS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
 Year Ended October 31,2006
    
    
    2005
    
    
    2004Cash Flows from Operating Activities:Net income
    
    $
    5,788
    
    
    $
    3,322
    
    
    $
    6,210Adjustments to reconcile net income to net cash provided by
operating activities:Depreciation and amortization
    
    
    2,035
    
    
    
    2,862
    
    
    
    2,648Provision for losses on accounts receivable
    
    
    14
    
    
    
    475
    
    
    
    25Income from Maui Fresh, LLC
    
    
    (79
    )
    
    
    
    
    
    
    Stock compensation expense
    
    
    666
    
    
    
    84
    
    
    
    46Loss (gain) on disposal of property, plant, and equipment
    
    
    23
    
    
    
    (1,668
    )
    
    
    Effect on cash of changes in operating assets and liabilities:Accounts receivable
    
    
    (4,963
    )
    
    
    1,403
    
    
    
    (4,596
    )Inventories, net
    
    
    (473
    )
    
    
    1,279
    
    
    
    (3,354
    )Prepaid expenses and other assets
    
    
    (1,969
    )
    
    
    (723
    )
    
    
    2,798Advances to suppliers
    
    
    (265
    )
    
    
    1,272
    
    
    
    (1,789
    )Income taxes receivable
    
    
    (1,229
    )
    
    
    (31
    )
    
    
    (803
    )Deferred income taxes
    
    
    767
    
    
    
    (1,925
    )
    
    
    (320
    )Payable to growers
    
    
    4,581
    
    
    
    (4,036
    )
    
    
    2,343Trade accounts payable and accrued expenses
    
    
    2,923
    
    
    
    3,254
    
    
    
    1,303Income tax payable
    
    
    
    
    
    
    
    
    
    
    (51
    )Net cash provided by operating activities
    
    
    7,819
    
    
    
    5,568
    
    
    
    4,460Cash Flows from Investing Activities:Direct costs of acquisition of Maui Fresh International, Inc.
    
    
    
    
    
    
    
    
    
    
    (65
    )Acquisitions of property, plant, and equipment
    
    
    (4,513
    )
    
    
    (1,874
    )
    
    
    (8,409
    )Cash settlement of the acquisition of Limoneira stock, net of our common stock issued
    
    
    
    
    
    
    (13,450
    )
    
    
    Investment
in Maui Fresh, LLC
    
    
    (150
    )
    
    
    
    
    
    
    Proceeds from sale of building
    
    
    
    
    
    
    3,383
    
    
    
    Net cash used in investing activities
    
    
    (4,663
    )
    
    
    (11,941
    )
    
    
    (8,474
    )Cash Flows from Financing Activities:Dividend paid to shareholders
    
    
    (4,564
    )
    
    
    (4,052
    )
    
    
    (3,376
    )Proceeds from (repayments of) short-term borrowings, net
    
    
    2,380
    
    
    
    (576
    )
    
    
    2,000Proceeds from issuance of long-term debt
    
    
    
    
    
    
    13,000
    
    
    
    Payments on long-term obligations
    
    
    (1,318
    )
    
    
    (24
    )
    
    
    (29
    )Retirement of common stock
    
    
    (1,200
    )
    
    
    (2,000
    )
    
    
    Proceeds from stock option exercises
    
    
    257
    
    
    
    275
    
    
    
    Proceeds from collection of shareholder notes receivable
    
    
    206
    
    
    
    247
    
    
    
    680Net cash provided by (used in) financing activities
    
    
    (4,239
    )
    
    
    6,870
    
    
    
    (725
    )Net increase (decrease) in cash and cash equivalents
    
    
    (1,083
    )
    
    
    497
    
    
    
    (4,739
    )Cash and cash equivalents, beginning of year
    
    
    1,133
    
    
    
    636
    
    
    
    5,375Cash and cash equivalents, end of year
    
    $
    50
    
    
    $
    1,133
    
    
    $
    636Supplemental Information -Cash paid during the year for:Interest
    
    $
    943
    
    
    $
    399
    
    
    $
    66Income taxes
    
    $
    4,091
    
    
    $
    3,875
    
    
    $
    4,899Noncash Investing and Financing Activities:Tax receivable increase related to stock option exercise
    
    $
    146
    
    
    $
    59
    
    
    $
    Declared dividends payable
    
    $
    4,573
    
    
    $
    4,564
    
    
    $
    4,052Issuance of our common stock in Limoneira transaction
    
    $
    
    
    
    $
    10,000
    
    
    $
    Construction in progress included in trade accounts payable and accrued expenses
    
    $
    438
    
    
    $
    396
    
    
    $
    Unrealized holding gains (losses)
    
    $
    (11,755
    )
    
    $
    22,184
    
    
    $
    
  (in thousands)
    
    2004Fixed assets
    
    $
    114Goodwill
    
    
    3,526Intangible assets
    
    
    867Total non-cash assets acquired
    
    
    4,507Current liabilities
    
    
    110Deferred tax liabilities assumed
    
    
    347Net non-cash assets acquired
    
    $
    4,050
 See accompanying notes to consolidated financial statements.
 30




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##### Table of Contents



CALAVO GROWERS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 1. Description of the business
 Business
  2. Basis of Presentation and Summary of Significant Accounting Policies
   Cash and Cash Equivalents
  Inventories
  Property, Plant, and Equipment
  Accounting for Costs of Computer Software Developed or Obtained for Internal Use
 Goodwill and Acquired Intangible Assets
 Goodwill and Other Intangible Assets
 31




---



##### Table of Contents



Long-lived Assets
  Investments
  Marketable Securities
 Accounting
for Certain Investments in Debt and Equity Securities
 Advances to Suppliers
  32




---



##### Table of Contents



Accrued Expenses
  Revenue Recognition
  Promotional Allowances
  Allowance for Accounts Receivable
  Consignment Arrangements
  2006
    
    
    2005
    
    
    2004Sales
    
    $
    10,127
    
    
    $
    27,171
    
    
    $
    27,346Cost of Sales
    
    
    8,943
    
    
    
    25,456
    
    
    
    25,500Gross Margin
    
    $
    1,184
    
    
    $
    1,715
    
    
    $
    1,846
 Advertising Expense
  Other income, net
  Use of Estimates
  33




---



##### Table of Contents



Income Taxes
 Accounting for Income Taxes
 Basic and Diluted Net Income per Share
  Stock-Based Compensation
 Share-Based Payment Accounting for Stock-Based Compensation Accounting for Stock Issued to Employees
 Accounting for Stock-Based Compensation  Transition and Disclosure
  Year endedOctober 31,2005
    
    
    2004Net Income:As reported
    
    $
    3,322
    
    
    $
    6,210Add: Total stock-based compensation
expense determined under APB 25 and related
interpretations, net of tax effects
    
    
    51
    
    
    
    28Deduct: Total stock-based compensation
expense determined under fair value based
method for all awards, net of tax effects
    
    
    (54
    )
    
    
    (28
    )Pro forma
    
    $
    3,319
    
    
    $
    6,210
 34




---



##### Table of Contents



Year endedOctober 31,2005
    
    
    2004Net income per share, as reported:Basic
    
    $
    0.25
    
    
    $
    0.46Diluted
    
    $
    0.25
    
    
    $
    0.46Net income per share, pro forma:Basic
    
    $
    0.25
    
    
    $
    0.46Diluted
    
    $
    0.25
    
    
    $
    0.46
  2005
    
    2004Risk-free interest rate
    
    
    4.1
    %
    
    
    3.3
    %Expected volatility
    
    
    27.6
    %
    
    
    26.9
    %Dividend yield
    
    
    3.2
    %
    
    
    20
    %Expected life (years)
    
    
    3
    
    
    
    5Weighted-average fair value of options granted
    
    $
    1.65
    
    
    $
    3.01
       Foreign Currency Translation and Remeasurement
  35




---



##### Table of Contents



Fair Value of Financial Instruments
  Derivative Financial Instruments
  Recent Accounting Pronouncements
 Accounting
Changes and Error Corrections Accounting Changes Reporting Accounting Changes in Interim Financial Statements
 Accounting for Certain Hybrid Financial
Instruments-an amendment of FASB Statements No. 133 and 140
 Accounting for Uncertainty in Income
Taxes  an interpretation of FASB Statement No. 109 Accounting for Income Taxes
  Fair Value Measurements
 36




---



##### Table of Contents



Employers Accounting for Defined Benefit
Pension and Other Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106, and
132(R)
 Comprehensive Income (Loss)
  3. Inventories
  October 31,2006
    
    
    2005Fresh fruit
    
    $
    4,961
    
    
    $
    3,525Packing supplies and ingredients
    
    
    2,380
    
    
    
    2,015Finished processed foods
    
    
    3,228
    
    
    
    4,556$
    10,569
    
    
    $
    10,096
     37




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##### Table of Contents



4. Property, Plant, and Equipment
  October 31,2006
    
    
    2005Land
    
    $
    947
    
    
    $
    952Buildings and improvements
    
    
    13,840
    
    
    
    13,611Leasehold improvements
    
    
    171
    
    
    
    212Equipment
    
    
    31,793
    
    
    
    28,889Information systems  Hardware and software
    
    
    4,324
    
    
    
    3,997Construction in progress
    
    
    2,841
    
    
    
    1,34953,916
    
    
    
    49,010Less accumulated depreciation and amortization
    
    
    (34,008
    )
    
    
    (32,113
    )$
    19,908
    
    
    $
    16,897
  5. Other Assets
  6. Short-Term Borrowings
  7. Employee Benefit Plans
   38




---



##### Table of Contents



2006
    
    
    2005Change in projected benefit obligation:Projected benefit obligation at beginning of year
    
    $
    510
    
    
    $
    500Interest cost
    
    
    29
    
    
    
    28Actuarial loss (gain)
    
    
    (75
    )
    
    
    37Benefits paid
    
    
    (50
    )
    
    
    (55
    )Projected benefit obligation at end of year (unfunded)
    
    $
    414
    
    
    $
    510
  2006
    
    
    2005Projected benefit obligation
    
    $
    414
    
    
    $
    510Unrecognized net (gain) loss
    
    
    
    
    
    
    Recorded pension liabilities
    
    $
    414
    
    
    $
    510
  2006
    
    2005Discount rate on projected benefit obligation
    
    
    6.00
    %
    
    
    6.00
    %
 8. Commitments and Contingencies
 Commitments and guarantees
  2007
    
    $
    1,2792008
    
    
    5852009
    
    
    5472010
    
    
    5062011
    
    
    381Thereafter
    
    
    2,372$
    5,670
 TM
    39




---



##### Table of Contents



Litigation
   9. Related-Party Transactions
     10. Income Taxes
  2006
    
    
    2005
    
    
    2004Current:Federal
    
    $
    2,423
    
    
    $
    3,046
    
    
    $
    3,018State
    
    
    598
    
    
    
    767
    
    
    
    844Foreign
    
    
    63
    
    
    
    293
    
    
    
    25Total current
    
    
    3,084
    
    
    
    4,106
    
    
    
    3,887Deferred
    
    
    536
    
    
    
    (1,925
    )
    
    
    (320
    )Total income tax provision
    
    $
    3,620
    
    
    $
    2,181
    
    
    $
    3,567
  40




---



##### Table of Contents



2006
    
    
    2005Allowances for accounts receivable
    
    $
    1,779
    
    
    $
    2,065Inventories
    
    
    292
    
    
    
    325State taxes
    
    
    62
    
    
    
    80Accrued liabilities
    
    
    215
    
    
    
    181Current deferred income taxes
    
    
    2,348
    
    
    
    2,651Property, plant, and equipment
    
    
    (541
    )
    
    
    217Intangible assets
    
    
    (231
    )
    
    
    (282
    )Unrealized Gain, Limoneira investment
    
    
    (4,136
    )
    
    
    (8,798
    )Retirement benefits
    
    
    177
    
    
    
    218Stock-based compensation
    
    
    340
    
    
    
    56Long-term deferred income taxes
    
    $
    (4,391
    )
    
    $
    (8,589
    )
  2006
    
    2005
    
    2004Federal statutory tax rate
    
    
    35
    %
    
    
    35
    %
    
    
    35
    %State taxes, net of federal effects
    
    
    5
    
    
    
    5
    
    
    
    5Foreign income taxes greater (less) than U.S.
    
    
    (1
    )
    
    
    1
    
    
    
    (3
    )Benefit of lower federal tax brackets
    
    
    (1
    )
    
    
    (1
    )
    
    
    (1
    )Other
    
    
    
    
    
    
    
    
    
    
    38
    %
    
    
    40
    %
    
    
    36
    %
   11. Segment Information
 Disclosures about Segments of an Enterprise and Related Information
 Fresh
    
    
    Processed
    
    
    Inter-segmentproducts
    
    
    products
    
    
    eliminations
    
    
    Total(All amounts are presented in thousands)Year ended October 31, 2006Net sales
    
    $
    246,421
    
    
    $
    43,248
    
    
    $
    (15,759
    )
    
    $
    273,910Cost of sales
    
    
    227,748
    
    
    
    32,650
    
    
    
    (15,759
    )
    
    
    244,639Gross margin
    
    $
    18,673
    
    
    $
    10,598
    
    
    $
    
    
    
    $
    29,271
 41




---



##### Table of Contents



Fresh
    
    
    Processed
    
    
    Inter-segmentproducts
    
    
    products
    
    
    eliminations
    
    
    Total(All amounts are presented in thousands)Year ended October 31, 2005Net sales
    
    $
    246,139
    
    
    $
    34,699
    
    
    $
    (22,016
    )
    
    $
    258,822Cost of sales
    
    
    229,068
    
    
    
    30,036
    
    
    
    (22,016
    )
    
    
    237,088Gross margin
    
    $
    17,071
    
    
    $
    4,663
    
    
    $
    
    
    
    $
    21,734Year ended October 31, 2004Net sales
    
    $
    257,909
    
    
    $
    32,749
    
    
    $
    (16,440
    )
    
    $
    274,218Cost of sales
    
    
    235,849
    
    
    
    29,405
    
    
    
    (16,440
    )
    
    
    248,814Gross margin
    
    $
    22,060
    
    
    $
    3,344
    
    
    $
    
    
    
    $
    25,404
  Year ended October 31, 2006Fresh
    
    
    Processedproducts
    
    
    products
    
    
    TotalThird-party sales:California avocados
    
    $
    140,995
    
    
    $
    
    
    
    $
    140,995Imported avocados
    
    
    51,211
    
    
    
    
    
    
    
    51,211Papayas
    
    
    4,811
    
    
    
    
    
    
    
    4,811Specialities and tropicals
    
    
    9,724
    
    
    
    
    
    
    
    9,724Processed  food service
    
    
    
    
    
    
    34,021
    
    
    
    34,021Processed  retail and club
    
    
    
    
    
    
    10,454
    
    
    
    10,454Total fruit and product sales to third-parties
    
    
    206,741
    
    
    
    44,475
    
    
    
    251,216Freight and other charges
    
    
    30,156
    
    
    
    637
    
    
    
    30,793Total third-party sales
    
    
    236,897
    
    
    
    45,112
    
    
    
    282,009Less sales incentives
    
    
    (8
    )
    
    
    (8,091
    )
    
    
    (8,099
    )Total net sales to third-parties
    
    
    236,889
    
    
    
    37,021
    
    
    
    273,910Intercompany sales
    
    
    9,532
    
    
    
    6,227
    
    
    
    15,759Net sales before eliminations
    
    $
    246,421
    
    
    $
    43,248
    
    
    
    289,669Intercompany sales eliminations
    
    
    
    
    
    
    
    
    
    
    (15,759
    )Consolidated net sales
    
    
    
    
    
    
    
    
    
    $
    273,910
 Year ended October 31, 2005Fresh
    
    
    Processedproducts
    
    
    products
    
    
    TotalThird-party sales:California avocados
    
    $
    104,481
    
    
    $
    
    
    
    $
    104,481Imported avocados
    
    
    81,756
    
    
    
    
    
    
    
    81,756Papayas
    
    
    6,251
    
    
    
    
    
    
    
    6,251Specialities and tropicals
    
    
    13,777
    
    
    
    
    
    
    
    13,777Processed  food service
    
    
    
    
    
    
    28,307
    
    
    
    28,307Processed  retail and club
    
    
    
    
    
    
    6,766
    
    
    
    6,766Total fruit and product sales to third-parties
    
    
    206,265
    
    
    
    35,073
    
    
    
    241,338Freight and other charges
    
    
    24,129
    
    
    
    258
    
    
    
    24,387Total third-party sales
    
    
    230,394
    
    
    
    35,331
    
    
    
    265,725Less sales incentives
    
    
    (105
    )
    
    
    (6,798
    )
    
    
    (6,903
    )Total net sales to third-parties
    
    
    230,289
    
    
    
    28,533
    
    
    
    258,822Intercompany sales
    
    
    15,850
    
    
    
    6,166
    
    
    
    22,016Net sales before eliminations
    
    $
    246,139
    
    
    $
    34,699
    
    
    
    280,838Intercompany sales eliminations
    
    
    
    
    
    
    
    
    
    
    (22,016
    )Consolidated net sales
    
    
    
    
    
    
    
    
    
    $
    258,822
 42




---



##### Table of Contents



Year ended October 31, 2004Fresh
    
    
    ProcessedProducts
    
    
    Products
    
    
    TotalThird-party sales:California avocados
    
    $
    150,159
    
    
    $
    
    
    
    $
    150,159Imported avocados
    
    
    54,589
    
    
    
    
    
    
    
    54,589Papayas
    
    
    6,846
    
    
    
    
    
    
    
    6,846Specialities and tropicals
    
    
    14,233
    
    
    
    
    
    
    
    14,233Processed  food service
    
    
    
    
    
    
    27,352
    
    
    
    27,352Processed  retail and club
    
    
    
    
    
    
    4,285
    
    
    
    4,285Total fruit and product sales to third-parties
    
    
    225,827
    
    
    
    31,637
    
    
    
    257,464Freight and other charges
    
    
    22,914
    
    
    
    534
    
    
    
    23,448Total third-party sales
    
    
    248,741
    
    
    
    32,171
    
    
    
    280,912Less sales incentives
    
    
    (179
    )
    
    
    (6,515
    )
    
    
    (6,694
    )Total net sales to third-parties
    
    
    248,562
    
    
    
    25,656
    
    
    
    274,218Intercompany sales
    
    
    9,347
    
    
    
    7,093
    
    
    
    16,440Net sales before eliminations
    
    $
    257,909
    
    
    $
    32,749
    
    
    
    290,658Intercompany sales eliminations
    
    
    
    
    
    
    
    
    
    
    (16,440
    )Consolidated net sales
    
    
    
    
    
    
    
    
    
    $
    274,218
  United States
    
    Mexico
    
    Consolidated2006
    
    $
    50,014
    
    
    $
    11,703
    
    
    $
    61,7172005
    
    $
    55,587
    
    
    $
    11,849
    
    
    $
    67,436
  12. Investment in Limoneira Company
   43




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##### Table of Contents



13. Long-Term Obligations
  2006
    
    
    2005Farm Credit West, PCA
    
    $
    11,700
    
    
    $
    13,000Other
    
    
    14
    
    
    
    3211,714
    
    
    
    13,032Less current portion
    
    
    (1,308
    )
    
    
    (1,313
    )$
    10,406
    
    
    $
    11,719
    TotalYear ending October 31:2007
    
    $
    1,3082008
    
    
    1,3062009
    
    
    1,3002010
    
    
    1,3002011
    
    
    1,300Thereafter
    
    
    5,200$
    11,714
 14. Stock-Based Compensation
  The Directors Stock Option Plan
    44




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##### Table of Contents



Weighted-Average
    
    
    AggregateNumber of Shares
    
    
    Exercise Price
    
    
    Intrinsic ValueOutstanding at October 31, 2005
    
    
    100
    
    
    $
    6.00Exercised
    
    
    (51
    )
    
    $
    5.04Outstanding at October 31, 2006
    
    
    49
    
    
    $
    7.00
    
    
    $
    138Exercisable at October 31, 2006
    
    
    34
    
    
    $
    7.00
    
    
    $
    94
  The Employee Stock Purchase Plan
   The 2005 Stock Incentive Plan
  
    
    Incentive stock options that are intended to satisfy the requirements of Section 422 of the Internal Revenue Code of
1986, as amended, and the regulations thereunder;
    
    Non-qualified stock options that are not intended to be incentive stock options; and
    
    Shares of common stock that are subject to specified restrictions
   15. Dividends
  45




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16. Joint Venture in Maui Fresh International, LLC
     46




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47




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48




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Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
  
 Item 9A. Controls and Procedures
 Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures
  Managements Report on Internal Control Over Financial Reporting
 Internal Control  Integrated Framework Internal Control  Integrated Framework
 49




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Internal
ControlIntegrated Framework
       
 50




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##### Table of Contents



Changes in Internal Control Over Financial Reporting
  
 Item 9B. Other Information
  
 PART III
  
 Item 10. Directors and Executive Officers of the Registrant
    http://www.calavo.com
 
 Item 11. Executive Compensation
  
 Item 12. Security Ownership of Certain Beneficial Owners and Management
  51




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Item 13. Certain Relationships and Related Transactions
  
 Item 14. Principal Accountants Fees and Services
  
 Part IV
 
 Item 15. Exhibits and Financial Statement Schedules
 Financial Statements
   Supplemental Schedules
   Exhibits
 ExhibitNumber
    
    Description2.1
    
    Agreement and Plan of Merger and Reorganization dated as of
February 20, 2001 between Calavo Growers, Inc. and Calavo
Growers of California.12.2
    
    Agreement and Plan of Merger dated as of November 7, 2003
Among Calavo Growers, Inc., Calavo Acquisition, Inc., Maui Fresh
International, Inc. and Arthur J. Bruno, Robert J. Bruno and Javier J. Badillo73.1
    
    Articles of Incorporation of Calavo Growers, Inc.13.2
    
    Amended and Restated Bylaws of Calavo Growers, Inc.310.1
    
    Form of Marketing Agreement for Calavo Growers, Inc.810.2
    
    Marketing Agreement dated as of April 1, 1996 between
Tropical Hawaiian Products, Inc., a Hawaiian corporation,
and Calavo Growers of California.110.3
    
    Stock Purchase Agreement dated as of June 1, 2005, between
Limoneira Company and Calavo Growers, Inc.410.4
    
    Lease Agreement dated as of November 21, 1997, between Tede
S.A. de C.V., a Mexican corporation, and Calavo de Mexico,
S.A. de C.V., a Mexican corporation, including attached Guaranty
of Calavo Growers of California dated December 16, 1996.110.5
    
    Lease agreement dated as of February 15, 2005, between Limoneira
Company and Calavo Growers, Inc.410.6
    
    Standstill agreement dated June 1, 2005, between Limoneira
Company and Calavo Growers, Inc.410.7
    
    Standstill agreement dated June 1, 2005 between Calavo Growers, Inc.
And Limoneira Company4
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ExhibitNumber
    
    Description10.8
    
    Term Loan Agreement dated July 1, 2005, between Farm Credit
West, PCA, and Calavo Growers, Inc.510.9
    
    2005 Stock Incentive Plan Of Calavo Growers, Inc.610.10
    
    Calavo Supplemental Executive Retirement Agreement dated
March 11, 1989 between Egidio Carbone, Jr. and Calavo
Growers of California.110.11
    
    Amendment to the Calavo Growers of California Supplemental
Executive Retirement Agreement dated November 9, 1993
Between Egidio Carbone, Jr. and Calavo Growers of California.110.12
    
    2001 Stock Option Plan for Directors.210.13
    
    2001 Stock Purchase Plan for Officers and Employees.210.14
    
    Line of Credit Agreement between Farm Credit West, PCA and Calavo
Growers, Inc., dated October 5, 200610.15
    
    Business Loan Agreement between Bank of America, N.A. and Calavo
Growers, Inc., dated January 30, 20041210.16
    
    Renewal Notice for Business Loan Agreement, dated January 30, 2004,
Between Bank of America and Calavo Growers, Inc., dated November 18, 2005910.17
    
    Form of Stock Option Agreement1116
    
    Letter re change in certifying accountant1021.1
    
    Subsidiaries of Calavo Growers, Inc.123.1
    
    Consent of Ernst & Young LLP.23.2
    
    Consent of Deloitte & Touche LLP.31.1
    
    Certification of Chief Executive Officer Pursuant to Rule 13a-15(e)
or Rule 15d-15(e)31.2
    
    Certification of Chief Financial Officer Pursuant to Rule 13a-15(e)
or Rule 15d-15(e)32
    
    Certification of Chief Executive Officer and Chief Financial Officer of
Periodic Report Pursuant to 18 U.S.C. Section 1350
 
 1
    
    Previously filed on April 24, 2001 as an exhibit to the Registrants Registration Statement
on Form S-4, File No. 333-59418, and incorporated herein by reference.2
    
    Previously filed on December 18, 2001 as an exhibit to the Registrants Registration
Statement on Form S-8, File No. 333-75378, and incorporated herein by reference.3
    
    Previously filed on December 19, 2002 as an exhibit to the Registrants Report on Form 8-K, and incorporated herein by reference.4
    
    Previously filed on June 9, 2005 as an exhibit to the Registrants Report on Form 10Q and incorporated herein by reference.5
    
    Previously filed on September 9, 2005 as an exhibit to the Registrants Report on Form 10Q and incorporated herein by reference.6
    
    Previously filed on March 21, 2005 as an exhibit to the Registrants Definitive Proxy
Statement on Form DEF14A and incorporated herein by reference.7
    
    Previously filed on January 23, 2004 as an exhibit to the Registrants Report on Form 10K and incorporated herein by reference.8
    
    Previously filed on January 28, 2003 as an exhibit to the Registrants Report on Form 10K and incorporated herein by reference.9
    
    Previously filed on February 1, 2006 as an exhibit to the Registrants Report on Form 10K and incorporated herein by reference.10
    
    Previously filed on July 3, 2006 as an exhibit to the Registrants Report on Form 8-K and incorporated herein by reference.11
    
    Previously filed on September 11, 2006 as an exhibit to the Registrants Report on Form 10Q and incorporated herein by reference.12
    
    Previously filed on January 15, 2005 as an exhibit to the Registrants Report on Form 10K and incorporated herein by reference.   Financial Statement Schedules
  53




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SIGNATURES
  CALAVO GROWERS, INCBy:
    
    /s/ Lecil E. ColeLecil E. ColeChairman of the Board of Directors,Chief Executive Officer and President
  Signature
    
    Title/s/ Lecil E. Cole

Lecil E. Cole
    
    Chairman of the Board of Directors,
Chief Executive Officer and President
(Principal Executive Officer)/s/ Arthur J. Bruno

Arthur J. Bruno
    
    Chief Operating Officer, Chief Financial
Officer and Corporate Secretary
(Principal Financial Officer)/s/ James E. Snyder

James E. Snyder
    
    Corporate Controller
(Principal Accounting Officer)/s/ Donald M. Sanders

Donald M. Sanders
    
    Director/s/ Fred J. Ferrazzano

Fred J. Ferrazzano
    
    Director/s/ John M. Hunt

John M. Hunt
    
    Director/s/ George H. Barnes

George H. Barnes
    
    Director/s/ J. Link Leavens

J. Link Leavens
    
    Director/s/ Alva V. Snider

Alva V. Snider
    
    Director/s/ Michael D. Hause

Michael D. Hause
    
    Director/s/ Dorcas H. McFarlane

Dorcas H. McFarlane
    
    Director/s/ Egidio Carbone, Jr

Egidio Carbone, Jr
    
    Director/s/ Alan Van Wagner

Alan Van Wagner
    
    Director/s/ Harold Edwards

Harold Edwards
    
    Director/s/ Scott Van Der Kar

Scott Van Der Kar
    
    Director
 54




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SCHEDULE II
 CALAVO GROWERS, INC.
 VALUATION AND QUALIFYING ACCOUNTS (in thousands)
 Fiscal year
    
    Balance at
    
    
    
    
    
    
    
    
    
    Balance atended
    
    beginning
    
    
    
    
    
    
    
    
    
    endOctober 31:
    
    of year
    
    Additions(1)
    
    Deductions(2)
    
    of yearAllowance for customer deductions
    
    
    2004
    
    
    $
    659
    
    
    $
    3,817
    
    
    $
    3,454
    
    
    $
    1,0222005
    
    
    
    1,022
    
    
    
    6,791
    
    
    
    5,663
    
    
    
    2,1502006
    
    
    
    2,150
    
    
    
    5,147
    
    
    
    5,952
    
    
    
    1,345Allowance for doubtful accounts
    
    
    2004
    
    
    
    41
    
    
    
    25
    
    
    
    1
    
    
    
    652005
    
    
    
    65
    
    
    
    475
    
    
    
    2
    
    
    
    5382006
    
    
    
    538
    
    
    
    56
    
    
    
    106
    
    
    
    488
 
 (1)
    
    Charged to net sales (customer deductions) or costs and expenses (doubtful accounts).(2)
    
    Write-off of assets or collection of previously written-off assets 
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EXHIBIT INDEX
 ExhibitNumber
    
    Description2.1
    
    Agreement and Plan of Merger and Reorganization dated as of
February 20, 2001 between Calavo Growers, Inc. and Calavo
Growers of California.12.2
    
    Agreement and Plan of Merger dated as of November 7, 2003
Among Calavo Growers, Inc., Calavo Acquisition, Inc., Maui Fresh
International, Inc. and Arthur J. Bruno, Robert J. Bruno and Javier J. Badillo73.1
    
    Articles of Incorporation of Calavo Growers, Inc.13.2
    
    Amended and Restated Bylaws of Calavo Growers, Inc.310.1
    
    Form of Marketing Agreement for Calavo Growers, Inc.810.2
    
    Marketing Agreement dated as of April 1, 1996 between
Tropical Hawaiian Products, Inc., a Hawaiian corporation,
and Calavo Growers of California.110.3
    
    Stock Purchase Agreement dated as of June 1, 2005, between
Limoneira Company and Calavo Growers, Inc.410.4
    
    Lease Agreement dated as of November 21, 1997, between Tede
S.A. de C.V., a Mexican corporation, and Calavo de Mexico,
S.A. de C.V., a Mexican corporation, including attached Guaranty
of Calavo Growers of California dated December 16, 1996.110.5
    
    Lease agreement dated as of February 15, 2005, between Limoneira
Company and Calavo Growers, Inc.410.6
    
    Standstill agreement dated June 1, 2005, between Limoneira
Company and Calavo Growers, Inc.410.7
    
    Standstill agreement dated June 1, 2005 between Calavo Growers, Inc.
And Limoneira Company410.8
    
    Term Loan Agreement dated July 1, 2005, between Farm Credit
West, PCA, and Calavo Growers, Inc.510.9
    
    2005 Stock Incentive Plan Of Calavo Growers, Inc.610.10
    
    Calavo Supplemental Executive Retirement Agreement dated
March 11, 1989 between Egidio Carbone, Jr. and Calavo
Growers of California.110.11
    
    Amendment to the Calavo Growers of California Supplemental
Executive Retirement Agreement dated November 9, 1993
Between Egidio Carbone, Jr. and Calavo Growers of California.110.12
    
    2001 Stock Option Plan for Directors.210.13
    
    2001 Stock Purchase Plan for Officers and Employees.210.14
    
    Line of Credit Agreement between Farm Credit West, PCA and Calavo
Growers, Inc., dated October 5, 200610.15
    
    Business Loan Agreement between Bank of America, N.A. and Calavo
Growers, Inc., dated January 30, 20041210.16
    
    Renewal Notice for Business Loan Agreement, dated January 30, 2004,
Between Bank of America and Calavo Growers, Inc., dated November 18, 2005910.17
    
    Form of Stock Option Agreement1116
    
    Letter re change in certifying accountant1021.1
    
    Subsidiaries of Calavo Growers, Inc.123.1
    
    Consent of Ernst & Young LLP.23.2
    
    Consent of Deloitte & Touche LLP.31.1
    
    Certification of Chief Executive Officer Pursuant to Rule 13a-15(e)
or Rule 15d-15(e)31.2
    
    Certification of Chief Financial Officer Pursuant to Rule 13a-15(e)
or Rule 15d-15(e)32
    
    Certification of Chief Executive Officer and Chief Financial Officer of
Periodic Report Pursuant to 18 U.S.C. Section 1350
 
 1
    
    Previously filed on April 24, 2001 as an exhibit to the Registrants Registration Statement
on Form S-4, File No. 333-59418, and incorporated herein by reference.2
    
    Previously filed on December 18, 2001 as an exhibit to the Registrants Registration
Statement on Form S-8, File No. 333-75378, and incorporated herein by reference. 56




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3
    
    Previously filed on December 19, 2002 as an exhibit to the Registrants Report on Form 8-K, and incorporated herein by reference.4
    
    Previously filed on June 9, 2005 as an exhibit to the Registrants Report on Form 10Q and incorporated herein by reference.5
    
    Previously filed on September 9, 2005 as an exhibit to the Registrants Report on Form 10Q and incorporated herein by reference.6
    
    Previously filed on March 21, 2005 as an exhibit to the Registrants Definitive Proxy
Statement on Form DEF14A and incorporated herein by reference.7
    
    Previously filed on January 23, 2004 as an exhibit to the Registrants Report on Form 10K and incorporated herein by reference.8
    
    Previously filed on January 28, 2003 as an exhibit to the Registrants Report on Form 10K and incorporated herein by reference.9
    
    Previously filed on February 1, 2006 as an exhibit to the Registrants Report on Form 10K and incorporated herein by reference.10
    
    Previously filed on July 3, 2006 as an exhibit to the Registrants Report on Form 8-K and incorporated herein by reference.11
    
    Previously filed on September 11, 2006 as an exhibit to the Registrants Report on Form 10Q and incorporated herein by reference.12
    
    Previously filed on January 15, 2005 as an exhibit to the Registrants Report on Form 10K and incorporated herein by reference. 57