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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, 2007
 Commission file number: 000-33385
 CALAVO GROWERS, INC.
 (Exact name of registrant as specified in its charter)
 California
(State of incorporation)
    
    33-0945304
(I.R.S. Employer Identification No.)
 1141-A Cummings Road, Santa Paula, CA
(Address of principal executive offices)
    
    93060
(Zip code)
 Registrants telephone number, including area code: (805) 525-1245
 Securities registered pursuant to Section 12(b) of the Act:
 Name Of Each ExchangeTitle of Each Class
  
  On Which RegisteredCommon Stock, $0.001 Par Value per Share
  
  Nasdaq Global Select Market  Securities registered pursuant to Section 12(g) of the Act: None
 o þ
 o þ
 þ o
 o
  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, Executive Officers of the Registrant, and Corporate
GovernanceItem 11. Executive CompensationItem 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder MattersItem 13. Certain Relationships and Related Transactions, and Director IndependenceItem 14. Principal Accountants Fees and ServicesPart IVItem 15. Exhibits and Financial Statement SchedulesSIGNATURESEXHIBIT INDEXEXHIBIT 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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5




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th st
  
    
    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 invested in the 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.
  Processed Products
   6




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nd
   Sales and Other Financial Information by Business Segment and Product Category
  Patents and Trademarks
  Working Capital Requirements
   7




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Backlog
  Research and Development
  Compliance with Government Regulations
     Employees
   Location
    
    Salaried
    
    HourlyUnited States
    
    
    91
    
    
    
    107Mexico
    
    
    109
    
    
    
    521TOTAL
    
    
    200
    
    
    
    628
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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, Peru 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.
    
    California avocados 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.
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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.
  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.
  The value of our common stock may be adversely affected by market volatility.
  
    
    Our operating and financial performance and prospects;
    
    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; and
    
    General financial, domestic, international, economic and other market conditions;
 
 Item 1B. Unresolved Staff Comments
  
 Item 2. Properties
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Item 3. Legal Proceedings
  
 Item 4. Submission of Matters to a Vote of Security Holders
  Executive Officers of the Registrant
  Name
    
    Age
    
    PositionLecil E. Cole
    
    
    68
    
    
    Chairman of the Board, Chief Executive Officer and PresidentArthur J. Bruno
    
    
    57
    
    
    Chief Operating Officer, Chief Financial Officer and Corporate SecretaryRobert J. Wedin
    
    
    58
    
    
    Vice President, Sales and Fresh MarketingAlan C. Ahmer
    
    
    59
    
    
    Vice President, Processed Product Sales and ProductionMichael A. Browne
    
    
    49
    
    
    Vice President, Fresh Operations
 Lecil E. Cole
 Arthur J. Bruno
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##### Table of Contents



Robert J. Wedin
 Alan C. Ahmer
 Michael A. Browne
 
 PART II
 
 Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
  Fiscal 2007
    
    High
    
    LowFirst Quarter
    
    $
    11.67
    
    
    $
    9.61Second Quarter
    
    $
    14.09
    
    
    $
    10.50Third Quarter
    
    $
    14.52
    
    
    $
    11.85Fourth Quarter
    
    $
    22.91
    
    
    $
    14.45
 Fiscal 2006
    
    High
    
    LowFirst Quarter
    
    $
    10.50
    
    
    $
    9.59Second Quarter
    
    $
    11.00
    
    
    $
    9.51Third Quarter
    
    $
    11.94
    
    
    $
    9.37Fourth Quarter
    
    $
    10.24
    
    
    $
    9.04
   Dividend Policy
    12




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Shareowner Return Performance Graph
  COMPARE CUMULATIVE TOTAL RETURN
AMONG CALAVO GROWERS, INC.,
NASDAQ MARKET INDEX AND HEMSCOTT GROUP INDEX
 
 
 13




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Item 6. Selected Financial Data
 SELECTED CONSOLIDATED FINANCIAL DATA
   Fiscal Year Ended October 31,2007
    
    2006
    
    2005
    
    2004
    
    2003(In thousands, except per share data)Income Statement Data: (1)Net sales
    
    $
    302,984
    
    
    $
    273,723
    
    
    $
    258,822
    
    
    $
    274,218
    
    
    $
    246,761Gross margin
    
    
    31,772
    
    
    
    29,084
    
    
    
    21,734
    
    
    
    25,404
    
    
    
    25,465Net income
    
    
    7,330
    
    
    
    5,788
    
    
    
    3,322
    
    
    
    6,210
    
    
    
    7,160Basic and diluted net income per share
    
    $
    0.51
    
    
    $
    0.40
    
    
    $
    0.24
    
    
    $
    0.46
    
    
    $
    0.55Balance Sheet Data as of End of
Period:Working capital
    
    $
    16,334
    
    
    $
    12,023
    
    
    $
    17,618
    
    
    $
    20,353
    
    
    $
    20,735Total assets(4)
    
    
    128,018
    
    
    
    107,563
    
    
    
    108,482
    
    
    
    67,398
    
    
    
    53,689Short-term debt(4)
    
    
    1,307
    
    
    
    1,308
    
    
    
    1,313
    
    
    
    22
    
    
    
    24Long-term debt, less current portion(2)(4)
    
    
    13,106
    
    
    
    10,406
    
    
    
    11,719
    
    
    
    34
    
    
    
    61Shareholders equity(4)
    
    
    74,003
    
    
    
    58,943
    
    
    
    64,746
    
    
    
    43,937
    
    
    
    37,147Cash Flows Provided by (Used in):Operations
    
    $
    4,629
    
    
    $
    7,819
    
    
    $
    5,568
    
    
    $
    4,460
    
    
    $
    15,222Investing(3)(4)(5)
    
    
    (7,950
    )
    
    
    (4,663
    )
    
    
    (11,941
    )
    
    
    (8,474
    )
    
    
    (4,475
    )Financing(4)
    
    
    4,238
    
    
    
    (4,239
    )
    
    
    6,870
    
    
    
    (725
    )
    
    
    (6,293
    )Other Data:Dividends per share
    
    $
    0.35
    
    
    $
    0.32
    
    
    $
    0.32
    
    
    $
    0.30
    
    
    $
    0.25Net book value per share
    
    $
    5.15
    
    
    $
    4.12
    
    
    $
    4.51
    
    
    $
    3.25
    
    
    $
    2.87Pounds of California avocados sold
    
    
    91,038
    
    
    
    218,460
    
    
    
    104,950
    
    
    
    152,725
    
    
    
    122,950Pounds of non-California avocados sold
    
    
    135,723
    
    
    
    70,063
    
    
    
    103,830
    
    
    
    69,410
    
    
    
    70,348Pounds of processed avocados products sold
    
    
    22,556
    
    
    
    20,489
    
    
    
    15,628
    
    
    
    13,317
    
    
    
    14,707
 
 (1)
    
    Operating results for fiscal years 2007, 2006, 2005, and 2004 include the acquisition of Maui
Fresh International, Inc. For fiscal years 2007, 2006, 2005, and 2004, Mauis net sales,
gross margins, and net income were as follows: (2007) $29.5 million, $2.1 million, and $0.6
million, (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.(5)
    
    During the second and third quarters of fiscal 2007, we advanced $5 million to Agricola
Belher pursuant to our distribution and infrastructure agreements. See Note 16 to our
consolidated financial statements. 14




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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
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Recent Developments
 Dividend Payment
  Revolving Credit Facilities
  Agreements with Tomato Grower
    16




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Agreement with Mushroom Grower
   Agreement with Pineapple Grower
   Critical Accounting Estimates
    Promotional allowances .
 Income Taxes .
 Goodwill and acquired intangible assets Goodwill and Other Intangible
Assets
 17




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Allowance for accounts receivable
 Results of Operations
  Year ended October 31,2007
    
    2006
    
    2005Net sales
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Gross margins
    
    
    10.5
    %
    
    
    10.6
    %
    
    
    8.4
    %Selling, general and administrative
    
    
    6.5
    %
    
    
    7.2
    %
    
    
    7.2
    %Operating income
    
    
    4.0
    %
    
    
    3.4
    %
    
    
    1.2
    %Interest Income
    
    
    0.1
    %
    
    
    0.1
    %
    
    
    0.1
    %Interest Expense
    
    
    (0.4
    )%
    
    
    (0.3
    )%
    
    
    (0.2
    )%Other income, net
    
    
    0.2
    %
    
    
    0.2
    %
    
    
    0.9
    %Net income
    
    
    2.4
    %
    
    
    2.1
    %
    
    
    1.3
    %
 Net Sales
     18




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2007
    
    
    Change
    
    
    2006
    
    
    Change
    
    
    2005(Dollars in thousands)Net sales:Fresh products
    
    $
    261,325
    
    
    
    10.3
    %
    
    $
    236,889
    
    
    
    2.9
    %
    
    $
    230,289Processed products
    
    
    41,659
    
    
    
    13.1
    %
    
    
    36,834
    
    
    
    29.1
    %
    
    
    28,533Total net sales
    
    $
    302,984
    
    
    
    10.7
    %
    
    $
    273,723
    
    
    
    5.8
    %
    
    $
    258,822As a percentage of net sales:Fresh products
    
    
    86.3
    %
    
    
    
    
    
    
    86.5
    %
    
    
    
    
    
    
    89.0
    %Processed products
    
    
    13.7
    %
    
    
    
    
    
    
    13.5
    %
    
    
    
    
    
    
    11.0
    %100.0
    %
    
    
    
    
    
    
    100.0
    %
    
    
    
    
    
    
    100.0
    %
   Year ended October 31, 2007
    
    
    Year ended October 31, 2006Fresh
    
    
    Processed
    
    
    
    
    
    
    Fresh
    
    
    Processedproducts
    
    
    products
    
    
    Total
    
    
    products
    
    
    products
    
    
    TotalThird-party sales:California avocados
    
    $
    95,130
    
    
    $
    
    
    
    $
    95,130
    
    
    $
    140,995
    
    
    $
    
    
    
    $
    140,995Imported avocados
    
    
    120,588
    
    
    
    
    
    
    
    120,588
    
    
    
    51,191
    
    
    
    
    
    
    
    51,191Papayas
    
    
    5,887
    
    
    
    
    
    
    
    5,887
    
    
    
    4,822
    
    
    
    
    
    
    
    4,822Specialities and tropicals
    
    
    12,923
    
    
    
    
    
    
    
    12,923
    
    
    
    9,543
    
    
    
    
    
    
    
    9,543Processed  food service
    
    
    
    
    
    
    38,338
    
    
    
    38,338
    
    
    
    
    
    
    
    34,021
    
    
    
    34,021Processed  retail and club
    
    
    
    
    
    
    10,706
    
    
    
    10,706
    
    
    
    
    
    
    
    10,454
    
    
    
    10,454Total fruit and product sales
to third-parties
    
    
    234,528
    
    
    
    49,044
    
    
    
    283,572
    
    
    
    206,551
    
    
    
    44,475
    
    
    
    251,026Freight and other charges
    
    
    26,816
    
    
    
    739
    
    
    
    27,555
    
    
    
    30,383
    
    
    
    637
    
    
    
    31,020Total gross sales to third-parties
    
    
    261,344
    
    
    
    49,783
    
    
    
    311,127
    
    
    
    236,934
    
    
    
    45,112
    
    
    
    282,046Less sales incentives
    
    
    (19
    )
    
    
    (8,124
    )
    
    
    (8,143
    )
    
    
    (8
    )
    
    
    (8,278
    )
    
    
    (8,323
    )Total net sales to third-parties
    
    
    261,325
    
    
    
    41,659
    
    
    
    302,984
    
    
    
    236,889
    
    
    
    36,834
    
    
    
    273,723Intercompany sales
    
    
    13,020
    
    
    
    8,123
    
    
    
    21,143
    
    
    
    9,532
    
    
    
    6,227
    
    
    
    15,759Net sales
    
    $
    274,345
    
    
    $
    49,782
    
    
    
    324,127
    
    
    $
    246,421
    
    
    $
    43,061
    
    
    
    289,482Intercompany sales eliminations
    
    
    
    
    
    
    
    
    
    
    (21,143
    )
    
    
    
    
    
    
    
    
    
    
    (15,759
    )Consolidated net sales
    
    
    
    
    
    
    
    
    
    $
    302,984
    
    
    
    
    
    
    
    
    
    
    $
    273,723
 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
    
    
    51,191
    
    
    
    
    
    
    
    51,191
    
    
    
    81,756
    
    
    
    
    
    
    
    81,756Papayas
    
    
    4,822
    
    
    
    
    
    
    
    4,822
    
    
    
    6,251
    
    
    
    
    
    
    
    6,251Specialities and tropicals
    
    
    9,543
    
    
    
    
    
    
    
    9,543
    
    
    
    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
    
    
    
    251,026
    
    
    
    206,265
    
    
    
    35,073
    
    
    
    241,338Freight and other charges
    
    
    30,156
    
    
    
    637
    
    
    
    31,020
    
    
    
    24,129
    
    
    
    258
    
    
    
    24,387Total gross sales to third-parties
    
    
    236,897
    
    
    
    45,112
    
    
    
    282,046
    
    
    
    230,394
    
    
    
    35,331
    
    
    
    265,725Less sales incentives
    
    
    (8
    )
    
    
    (8,278
    )
    
    
    (8,323
    )
    
    
    (105
    )
    
    
    (6,798
    )
    
    
    (6,903
    )Total net sales to third-parties
    
    
    236,889
    
    
    
    36,834
    
    
    
    273,723
    
    
    
    230,289
    
    
    
    28,533
    
    
    
    258,822Intercompany sales
    
    
    9,532
    
    
    
    6,227
    
    
    
    15,759
    
    
    
    15,850
    
    
    
    6,166
    
    
    
    22,016Net sales
    
    $
    246,421
    
    
    $
    43,061
    
    
    
    289,482
    
    
    $
    246,139
    
    
    $
    34,699
    
    
    
    280,838Intercompany sales eliminations
    
    
    
    
    
    
    
    
    
    
    (15,759
    )
    
    
    
    
    
    
    
    
    
    
    (22,016
    )Consolidated net sales
    
    
    
    
    
    
    
    
    
    $
    273,723
    
    
    
    
    
    
    
    
    
    
    $
    258,822
  19




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Fresh Products
   TM
          20




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Processed Products
   nd
    21




---



##### Table of Contents



Gross Margins
  2007
    
    
    Change
    
    
    2006
    
    
    Change
    
    
    2005(Dollars in thousands)Gross Margins:Fresh products
    
    $
    21,461
    
    
    
    14.9
    %
    
    $
    18,673
    
    
    
    9.4
    %
    
    $
    17,071Processed products
    
    
    10,311
    
    
    
    (1.0
    )%
    
    
    10,411
    
    
    
    123.3
    %
    
    
    4,663Total gross margins
    
    $
    31,772
    
    
    
    9.2
    %
    
    $
    29,084
    
    
    
    33.8
    %
    
    $
    21,734Gross profit percentages:Fresh products
    
    
    8.2
    %
    
    
    
    
    
    
    7.9
    %
    
    
    
    
    
    
    7.4
    %Processed products
    
    
    24.8
    %
    
    
    
    
    
    
    28.3
    %
    
    
    
    
    
    
    16.3
    %Consolidated
    
    
    10.5
    %
    
    
    
    
    
    
    10.6
    %
    
    
    
    
    
    
    8.4
    %
       22




---



##### Table of Contents



Selling, General and Administrative
 2007
    
    Change
    
    2006
    
    Change
    
    2005(Dollars in thousands)Selling, general and administrative
    
    $
    19,759
    
    
    NM
    
    $
    19,767
    
    
    
    6.3
    %
    
    $
    18,588Percentage of net sales
    
    
    6.5
    %
    
    
    
    
    
    
    7.2
    %
    
    
    
    
    
    
    7.2
    %
 
 NM 
    
    Not meaningful   Interest income
 2007
    
    Change
    
    2006
    
    Change
    
    2005(Dollars in thousands)Interest income
    
    $
    248
    
    
    
    (30.3
    )%
    
    $
    356
    
    
    
    2.3
    %
    
    $
    348Percentage of net sales
    
    
    0.1
    %
    
    
    
    
    
    
    0.1
    %
    
    
    
    
    
    
    0.1
    %
  Interest expense
 2007
    
    Change
    
    2006
    
    Change
    
    2005(Dollars in thousands)Interest expense
    
    $
    (1,346
    )
    
    
    42.7
    %
    
    $
    (943
    )
    
    
    136.3
    %
    
    $
    (399
    )Percentage of net sales
    
    
    (0.4
    )%
    
    
    
    
    
    
    (0.3
    )%
    
    
    
    
    
    
    (0.2
    )%
  23




---



##### Table of Contents



Other Income, Net
 2007
    
    Change
    
    2006
    
    Change
    
    2005(Dollars in thousands)Other income, net
    
    $
    512
    
    
    
    (14.5
    )%
    
    $
    599
    
    
    
    (75.1
    )%
    
    $
    2,408Percentage of net sales
    
    
    0.2
    %
    
    
    
    
    
    
    0.2
    %
    
    
    
    
    
    
    0.9
    %
  Provision for Income Taxes
 2007
    
    Change
    
    2006
    
    Change
    
    2005(Dollars in thousands)Provision for income taxes
    
    $
    4,271
    
    
    
    18.0
    %
    
    $
    3,620
    
    
    
    66.0
    %
    
    $
    2,181Percentage of income before
provision for income taxes
    
    
    36.8
    %
    
    
    
    
    
    
    38.5
    %
    
    
    
    
    
    
    39.6
    %
  Quarterly Results of Operations
  Three months endedOct. 31,
    
    
    July 31,
    
    
    Apr. 30,
    
    
    Jan. 31,
    
    
    Oct. 31,
    
    
    July 31,
    
    
    Apr. 30,
    
    
    Jan. 31,2007
    
    
    2007
    
    
    2007
    
    
    2007
    
    
    2006
    
    
    2006
    
    
    2006
    
    
    2006(in thousands, except per share amounts)Statement of Operations DataNet sales
    
    $
    85,295
    
    
    $
    91,212
    
    
    $
    69,184
    
    
    $
    57,293
    
    
    $
    76,880
    
    
    $
    78,954
    
    
    $
    67,429
    
    
    $
    50,647Cost of sales
    
    
    78,214
    
    
    
    82,680
    
    
    
    59,993
    
    
    
    50,325
    
    
    
    69,896
    
    
    
    68,738
    
    
    
    58,768
    
    
    
    47,237Gross margin
    
    
    7,081
    
    
    
    8,532
    
    
    
    9,191
    
    
    
    6,968
    
    
    
    6,984
    
    
    
    10,216
    
    
    
    8,661
    
    
    
    3,410Selling, general and administrative
    
    
    5,608
    
    
    
    4,708
    
    
    
    4,812
    
    
    
    4,631
    
    
    
    5,163
    
    
    
    5,284
    
    
    
    5,063
    
    
    
    4,444Operating income (loss)
    
    
    1,473
    
    
    
    3,824
    
    
    
    4,379
    
    
    
    2,337
    
    
    
    1,821
    
    
    
    4,932
    
    
    
    3,598
    
    
    
    (1,034
    )Other income (expense), net
    
    
    128
    
    
    
    (247
    )
    
    
    (137
    )
    
    
    (156
    )
    
    
    292
    
    
    
    (136
    )
    
    
    10
    
    
    
    (75
    )Income
(loss) before provision (benefit)
for income taxes
    
    
    1,601
    
    
    
    3,577
    
    
    
    4,242
    
    
    
    2,181
    
    
    
    2,113
    
    
    
    4,796
    
    
    
    3,608
    
    
    
    (1,109
    )Provision (benefit) for income taxes
    
    
    411
    
    
    
    1,355
    
    
    
    1,655
    
    
    
    850
    
    
    
    775
    
    
    
    1,870
    
    
    
    1,419
    
    
    
    (444
    )Net income (loss)
    
    $
    1,190
    
    
    $
    2,222
    
    
    $
    2,587
    
    
    $
    1,331
    
    
    $
    1,338
    
    
    $
    2,926
    
    
    $
    2,189
    
    
    $
    (665
    )Net income (loss) per share:Basic
    
    $
    0.08
    
    
    $
    0.16
    
    
    $
    0.18
    
    
    $
    0.09
    
    
    $
    0.09
    
    
    $
    0.21
    
    
    $
    0.15
    
    
    $
    (0.05
    )Diluted
    
    $
    0.08
    
    
    $
    0.15
    
    
    $
    0.18
    
    
    $
    0.09
    
    
    $
    0.09
    
    
    $
    0.21
    
    
    $
    0.15
    
    
    $
    (0.05
    )Number of shares used in per share
computation:Basic
    
    
    14,329
    
    
    
    14,300
    
    
    
    14,294
    
    
    
    14,293
    
    
    
    14,292
    
    
    
    14,171
    
    
    
    14,282
    
    
    
    14,352Diluted
    
    
    14,530
    
    
    
    14,452
    
    
    
    14,398
    
    
    
    14,359
    
    
    
    14,319
    
    
    
    14,237
    
    
    
    14,343
    
    
    
    14,352
 24




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##### Table of Contents



Liquidity and Capital Resources
          25




---



##### 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)
    
    $
    17,132
    
    
    $
    2,054
    
    
    $
    8,360
    
    
    $
    3,970
    
    
    $
    2,748Revolving credit facilities
    
    
    6,630
    
    
    
    6,630
    
    
    
    
    
    
    
    
    
    
    
    Defined benefit plan
    
    
    361
    
    
    
    47
    
    
    
    141
    
    
    
    94
    
    
    
    79Operating lease commitments
    
    
    4,719
    
    
    
    739
    
    
    
    1,602
    
    
    
    751
    
    
    
    1,627Total
    
    $
    28,842
    
    
    $
    9,470
    
    
    $
    10,103
    
    
    $
    4,815
    
    
    $
    4,454
   Impact of Recently Issued Accounting Pronouncements
  26




---



##### Table of Contents



Item 7A. Quantitative and Qualitative Disclosures About Market Risk
  Expected maturity date October 31,(All amounts in thousands)
    
    2008
    
    2009
    
    2010
    
    2011
    
    2012
    
    Thereafter
    
    Total
    
    Fair ValueAssetsCash and cash equivalents (1)
    
    $
    967
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    967
    
    
    $
    967Accounts receivable (1)
    
    
    25,992
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,992
    
    
    
    25,992Advances to Suppliers (1)
    
    
    2,292
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,292
    
    
    
    2,292LiabilitiesPayable to growers (1)
    
    $
    2,414
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    2,414
    
    
    $
    2,414Accounts payable (1)
    
    
    2,643
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,643
    
    
    
    2,643Current borrowings pursuant to credit
facilities (1)
    
    
    6,630
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,630
    
    
    
    6,630Long-term borrowings pursuant to credit
facilities (2)
    
    
    
    
    
    
    1,000
    
    
    
    1,000
    
    
    
    1,000
    
    
    
    1,000
    
    
    
    
    
    
    
    4,000
    
    
    
    4,092Fixed-rate long-term obligations (3)
    
    
    1,307
    
    
    
    1,306
    
    
    
    1,300
    
    
    
    1,300
    
    
    
    1,300
    
    
    
    3,900
    
    
    
    10,413
    
    
    
    9,972
 
 (1)
    
    We believe the carrying amounts of cash and cash equivalents, accounts receivable,
advances to suppliers, 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)
    
    Long-term borrowings pursuant to our credit facility bears interest at 6.4%. We
believe that a portfolio of loans with a similar risk profile would currently yield a
return of 5.7%. We project the impact of an increase or decrease in interest rates of 100
basis points would result in a change of fair value by approximately $122,000.(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 7.0%. 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 $333,000.   27




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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 31,2007
    
    
    2006AssetsCurrent assets:Cash and cash equivalents
    
    $
    967
    
    
    $
    50Accounts receivable, net of allowances
of $2,271 (2007) and $1,833 (2006)
    
    
    25,992
    
    
    
    24,202Inventories, net
    
    
    8,359
    
    
    
    10,569Prepaid expenses and other current assets
    
    
    4,911
    
    
    
    4,934Advances to suppliers
    
    
    2,292
    
    
    
    1,475Income taxes receivable
    
    
    1,539
    
    
    
    2,268Deferred income taxes
    
    
    2,525
    
    
    
    2,348Total current assets
    
    
    46,585
    
    
    
    45,846Property, plant, and equipment, net
    
    
    20,888
    
    
    
    19,908Investment in Limoneira
    
    
    48,962
    
    
    
    33,879Investment in Maui Fresh, LLC
    
    
    403
    
    
    
    229Goodwill
    
    
    3,591
    
    
    
    3,591Other assets
    
    
    7,589
    
    
    
    4,110$
    128,018
    
    
    $
    107,563Liabilities and shareholders equityCurrent liabilities:Payable to growers
    
    $
    2,414
    
    
    $
    6,334Trade accounts payable
    
    
    2,643
    
    
    
    4,046Accrued expenses
    
    
    12,227
    
    
    
    13,758Short-term borrowings
    
    
    6,630
    
    
    
    3,804Dividend payable
    
    
    5,030
    
    
    
    4,573Current portion of long-term obligations
    
    
    1,307
    
    
    
    1,308Total current liabilities
    
    
    30,251
    
    
    
    33,823Long-term liabilities:Long-term obligations, less current portion
    
    
    13,106
    
    
    
    10,406Deferred income taxes
    
    
    10,658
    
    
    
    4,391Total long-term liabilities
    
    
    23,764
    
    
    
    14,797Commitments and contingencies (Note 8)Shareholders equity:Common stock ($0.001 par value, 100,000 shares
authorized; 14,371 and 14,293 shares outstanding
at October 31, 2007 and 2006)
    
    
    14
    
    
    
    14Additional paid-in capital
    
    
    38,068
    
    
    
    37,109Notes receivable from shareholders
    
    
    
    
    
    
    (2,430
    )Accumulated other comprehensive income
    
    
    15,664
    
    
    
    6,293Retained earnings
    
    
    20,257
    
    
    
    17,957Total shareholders equity
    
    
    74,003
    
    
    
    58,943$
    128,018
    
    
    $
    107,563
 See accompanying notes to consolidated financial statements.
 28




---



##### Table of Contents



CALAVO GROWERS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
 Year Ended October 31,2007
    
    
    2006
    
    
    2005Net sales
    
    $
    302,984
    
    
    $
    273,723
    
    
    $
    258,822Cost of sales
    
    
    271,212
    
    
    
    244,639
    
    
    
    237,088Gross margin
    
    
    31,772
    
    
    
    29,084
    
    
    
    21,734Selling, general and administrative
    
    
    19,759
    
    
    
    19,767
    
    
    
    18,588Operating income
    
    
    12,013
    
    
    
    9,317
    
    
    
    3,146Equity in earnings from Maui Fresh, LLC
    
    
    174
    
    
    
    79
    
    
    
    Interest income
    
    
    248
    
    
    
    356
    
    
    
    348Interest expense
    
    
    (1,346
    )
    
    
    (943
    )
    
    
    (399
    )Other income, net
    
    
    512
    
    
    
    599
    
    
    
    2,408Income before provision for income taxes
    
    
    11,601
    
    
    
    9,408
    
    
    
    5,503Provision for income taxes
    
    
    4,271
    
    
    
    3,620
    
    
    
    2,181Net income
    
    $
    7,330
    
    
    $
    5,788
    
    
    $
    3,322Net income per share:Basic
    
    $
    0.51
    
    
    $
    0.40
    
    
    $
    0.24Diluted
    
    $
    0.51
    
    
    $
    0.40
    
    
    $
    0.24Number of shares used in per share computation:Basic
    
    
    14,304
    
    
    
    14,304
    
    
    
    13,892Diluted
    
    
    14,435
    
    
    
    14,354
    
    
    
    13,985
 See accompanying notes to consolidated financial statements.
 29




---



##### Table of Contents



CALAVO GROWERS, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(All amounts in thousands)
 Year endedOctober 31,2007
    
    
    2006
    
    
    2005Net income
    
    $
    7,330
    
    
    $
    5,788
    
    
    $
    3,322Other comprehensive income (loss), before tax:Unrealized holding gains (losses) arising during period
    
    
    15,083
    
    
    
    (11,755
    )
    
    
    22,184Income tax benefit (expense) related to items of other
comprehensive income (loss)
    
    
    (5,712
    )
    
    
    4,662
    
    
    
    (8,798
    )Other comprehensive income (loss), net of tax
    
    
    9,371
    
    
    
    (7,093
    )
    
    
    13,386Comprehensive income (loss)
    
    $
    16,701
    
    
    $
    (1,305
    )
    
    $
    16,708
 See accompanying notes to consolidated financial statements.
 30




---



##### 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, 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
    
    
    
    58,943Exercise of stock options and
income tax benefit of $233
    
    
    78
    
    
    
    
    
    
    
    943
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    943Stock compensation expense
    
    
    
    
    
    
    
    
    
    
    16
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16Unrealized gain on Limoneira investment,
net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,371
    
    
    
    
    
    
    
    9,371Collections on shareholder notes receivable
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,430
    
    
    
    
    
    
    
    
    
    
    
    2,430Dividend declared to shareholders
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,030
    )
    
    
    (5,030
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,330
    
    
    
    7,330Balance, October 31, 2007
    
    
    14,371
    
    
    $
    14
    
    
    $
    38,068
    
    
    $
    
    
    
    $
    15,664
    
    
    $
    20,257
    
    
    $
    74,003
 See accompanying notes to consolidated financial statements.
 31




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##### Table of Contents



CALAVO GROWERS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
 Year Ended October 31,2007
    
    
    2006
    
    
    2005Cash Flows from Operating Activities:Net income
    
    $
    7,330
    
    
    $
    5,788
    
    
    $
    3,322Adjustments to reconcile net income to net cash provided by
operating activities:Depreciation and amortization
    
    
    2,391
    
    
    
    2,326
    
    
    
    3,151Provision for losses on accounts receivable
    
    
    473
    
    
    
    14
    
    
    
    475Income from Maui Fresh, LLC
    
    
    (174
    )
    
    
    (79
    )
    
    
    Stock compensation expense
    
    
    16
    
    
    
    666
    
    
    
    84Loss (gain) on disposal of property, plant, and equipment
    
    
    8
    
    
    
    23
    
    
    
    (1,668
    )Deferred income taxes
    
    
    378
    
    
    
    767
    
    
    
    (1,925
    )Effect on cash of changes in operating assets and liabilities:Accounts receivable
    
    
    (2,263
    )
    
    
    (4,963
    )
    
    
    1,403Inventories, net
    
    
    2,210
    
    
    
    (473
    )
    
    
    1,279Prepaid expenses and other current assets
    
    
    1,023
    
    
    
    (974
    )
    
    
    (1,072
    )Advances to suppliers
    
    
    (886
    )
    
    
    (265
    )
    
    
    1,272Income taxes receivable
    
    
    816
    
    
    
    (1,229
    )
    
    
    (31
    )Other assets
    
    
    92
    
    
    
    (1,286
    )
    
    
    60Payable to growers
    
    
    (3,920
    )
    
    
    4,581
    
    
    
    (4,036
    )Trade accounts payable and accrued expenses
    
    
    (2,865
    )
    
    
    2,923
    
    
    
    3,254Net cash provided by operating activities
    
    
    4,629
    
    
    
    7,819
    
    
    
    5,568Cash Flows from Investing Activities:Acquisitions of property, plant, and equipment
    
    
    (2,950
    )
    
    
    (4,513
    )
    
    
    (1,874
    )Loan to Agricola Belher
    
    
    (5,000
    )
    
    
    
    
    
    
    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
    
    
    
    
    
    
    
    
    
    
    3,383Net cash used in investing activities
    
    
    (7,950
    )
    
    
    (4,663
    )
    
    
    (11,941
    )Cash Flows from Financing Activities:Dividend paid to shareholders
    
    
    (4,573
    )
    
    
    (4,564
    )
    
    
    (4,052
    )Proceeds from (repayments of) short-term borrowings, net
    
    
    6,826
    
    
    
    2,380
    
    
    
    (576
    )Proceeds from issuance of long-term debt
    
    
    
    
    
    
    
    
    
    
    13,000Payments on long-term obligations
    
    
    (1,301
    )
    
    
    (1,318
    )
    
    
    (24
    )Retirement of common stock
    
    
    
    
    
    
    (1,200
    )
    
    
    (2,000
    )Proceeds from stock option exercises
    
    
    710
    
    
    
    257
    
    
    
    275Tax benefit of stock option exercises
    
    
    146
    
    
    
    
    
    
    
    Proceeds from collection of shareholder notes receivable
    
    
    2,430
    
    
    
    206
    
    
    
    247Net cash provided by (used in) financing activities
    
    
    4,238
    
    
    
    (4,239
    )
    
    
    6,870Net increase (decrease) in cash and cash equivalents
    
    
    917
    
    
    
    (1,083
    )
    
    
    497Cash and cash equivalents, beginning of year
    
    
    50
    
    
    
    1,133
    
    
    
    636Cash and cash equivalents, end of year
    
    $
    967
    
    
    $
    50
    
    
    $
    1,133Supplemental Information Cash paid during the year for:Interest
    
    $
    1,310
    
    
    $
    936
    
    
    $
    399Income taxes
    
    $
    3,100
    
    
    $
    4,091
    
    
    $
    3,875Noncash Investing and Financing Activities:Tax receivable increase related to stock option exercise
    
    $
    233
    
    
    $
    146
    
    
    $
    59Declared dividends payable
    
    $
    5,030
    
    
    $
    4,573
    
    
    $
    4,564Issuance of our common stock in Limoneira transaction
    
    $
    
    
    
    $
    
    
    
    $
    10,000Construction in progress included in trade accounts payable and accrued expenses
    
    $
    
    
    
    $
    438
    
    
    $
    396Unrealized holding gains (losses)
    
    $
    15,083
    
    
    $
    (11,755
    )
    
    $
    22,184
 See accompanying notes to consolidated financial statements.
 32




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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 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
 33




---



##### Table of Contents



Long-lived Assets
  Investments
  Marketable Securities
 Accounting
for Certain Investments in Debt and Equity Securities
 Advances to Suppliers
  34




---



##### Table of Contents



Accrued Expenses
  Revenue Recognition
  Shipping and Handling
 Accounting for Shipping
and Handling Fees and Costs
 Promotional Allowances
  Allowance for Accounts Receivable
  Consignment Arrangements
  2007
    
    
    2006
    
    
    2005Sales
    
    $
    22,347
    
    
    $
    10,127
    
    
    $
    27,171Cost of Sales
    
    
    20,640
    
    
    
    8,943
    
    
    
    25,456Gross Margin
    
    $
    1,707
    
    
    $
    1,184
    
    
    $
    1,715
 Advertising Expense
  Other income, net
  35




---



##### Table of Contents



Use of Estimates
  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
  36




---



##### Table of Contents



Net Income:
    
    Fiscal Year Ended 2005As reported
    
    $
    3,322Add: Total stock-based compensation
expense determined under APB 25 and related
interpretations, net of tax effects
    
    
    51Deduct: Total stock-based compensation
expense determined under fair value based
method for all awards, net of tax effects
    
    
    (54
    )Pro forma
    
    $
    3,319Net income per share, as reported:Basic
    
    $
    0.25Diluted
    
    $
    0.25Net income per share, pro forma:Basic
    
    $
    0.25Diluted
    
    $
    0.25
    2007
    
    2005Risk-free interest rate
    
    
    3.25
    %
    
    
    4.1
    %Expected volatility
    
    
    22.19
    %
    
    
    27.6
    %Dividend yield
    
    
    3.1
    %
    
    
    3.2
    %Expected life (years)
    
    
    5.5
    
    
    
    3
   Foreign Currency Translation and Remeasurement
  37




---



##### Table of Contents



Fair Value of Financial Instruments
  Derivative Financial Instruments
  Recent Accounting Pronouncements
 Business Combinations
 Noncontrolling Interests in Consolidated Financial Statements Consolidated Financial Statements,
 The Fair Value Option for Financial Assets and
Financial Liabilities
 Employers Accounting for Defined Benefit
Pension and Other Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106, and
132(R)
 Fair Value Measurements
 Accounting for Uncertainty in Income
Taxes  an interpretation of FASB Statement No. 109 Accounting for Income Taxes
 Comprehensive Income (Loss)
  38




---



##### Table of Contents



Reclassifications
  3. Inventories
  October 31,2007
    
    
    2006Fresh fruit
    
    $
    3,884
    
    
    $
    4,961Packing supplies and ingredients
    
    
    2,389
    
    
    
    2,380Finished processed foods
    
    
    2,086
    
    
    
    3,228$
    8,359
    
    
    $
    10,569
     4. Property, Plant, and Equipment
  October 31,2007
    
    
    2006Land
    
    $
    947
    
    
    $
    947Buildings and improvements
    
    
    13,976
    
    
    
    13,840Leasehold improvements
    
    
    171
    
    
    
    171Equipment
    
    
    35,449
    
    
    
    31,793Information systems  Hardware and software
    
    
    4,689
    
    
    
    4,324Construction in progress
    
    
    886
    
    
    
    2,84156,118
    
    
    
    53,916Less accumulated depreciation and amortization
    
    
    (35,230
    )
    
    
    (34,008
    )$
    20,888
    
    
    $
    19,908
  5. Other Assets
  39




---



##### Table of Contents



6. Revolving Credit Facilities
  7. Employee Benefit Plans
    2007
    
    
    2006Change in projected benefit obligation:Projected benefit obligation at beginning of year
    
    $
    414
    
    
    $
    510Interest cost
    
    
    23
    
    
    
    29Actuarial gain
    
    
    (29
    )
    
    
    (75
    )Benefits paid
    
    
    (47
    )
    
    
    (50
    )Projected benefit obligation at end of year (unfunded)
    
    $
    361
    
    
    $
    414
  2007
    
    
    2006Projected benefit obligation
    
    $
    361
    
    
    $
    414Unrecognized net (gain) loss
    
    
    
    
    
    
    Recorded pension liabilities
    
    $
    361
    
    
    $
    414
  2007
    
    2006Discount rate on projected benefit obligation
    
    
    6.00
    %
    
    
    6.00
    %
 8. Commitments and Contingencies
 Commitments and guarantees
  40




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##### Table of Contents



2008
    
    $
    7392009
    
    
    6462010
    
    
    5582011
    
    
    3982012
    
    
    376Thereafter
    
    
    2,002$
    4,719
 TM Accounting for Operating Leases with Scheduled Rent
Increases
   Litigation
 Hacienda Suit
 Processed Products suit
  9. Related-Party Transactions
   41




---



##### Table of Contents



10. Income Taxes
  2007
    
    
    2006
    
    
    2005Current:Federal
    
    $
    2,865
    
    
    $
    2,423
    
    
    $
    3,046State
    
    
    817
    
    
    
    598
    
    
    
    767Foreign
    
    
    211
    
    
    
    63
    
    
    
    293Total current
    
    
    3,893
    
    
    
    3,084
    
    
    
    4,106Deferred
    
    
    378
    
    
    
    536
    
    
    
    (1,925
    )Total income tax provision
    
    $
    4,271
    
    
    $
    3,620
    
    
    $
    2,181
   2007
    
    
    2006Allowances for accounts receivable
    
    $
    2,021
    
    
    $
    1,779Inventories
    
    
    127
    
    
    
    292State taxes
    
    
    126
    
    
    
    62Accrued liabilities
    
    
    251
    
    
    
    215Current deferred income taxes
    
    $
    2,525
    
    
    $
    2,348Property, plant, and equipment
    
    
    (1,029
    )
    
    
    (541
    )Intangible assets
    
    
    (180
    )
    
    
    (231
    )Unrealized Gain, Limoneira investment
    
    
    (9,848
    )
    
    
    (4,136
    )Retirement benefits
    
    
    150
    
    
    
    177Stock-based compensation
    
    
    287
    
    
    
    340Other
    
    
    (38
    )
    
    
    Long-term deferred income taxes
    
    $
    (10,658
    )
    
    $
    (4,391
    )
  2007
    
    2006
    
    2005Federal statutory tax rate
    
    
    35.0
    %
    
    
    35.0
    %
    
    
    35
    %State taxes, net of federal effects
    
    
    5.0
    
    
    
    4.8
    
    
    
    4.7Foreign income taxes greater (less) than
U.S.
    
    
    (1.3
    )
    
    
    (0.8
    )
    
    
    1.2Benefit of lower federal tax brackets
    
    
    (0.7
    )
    
    
    (0.7
    )
    
    
    (1.6
    )Other
    
    
    (1.2
    )
    
    
    0.2
    
    
    
    0.336.8
    %
    
    
    38.5
    %
    
    
    39.6
    %
   11. Segment Information
  42




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##### Table of Contents



Fresh
    
    
    Processed
    
    
    Inter-segmentproducts
    
    
    products
    
    
    eliminations
    
    
    Total(All amounts are presented in thousands)Year ended October 31, 2007Net sales
    
    
    
    
    
    $
    274,345
    
    
    $
    49,782
    
    
    $
    (21,143
    )
    
    $
    302,984Cost of sales
    
    
    
    
    
    
    252,884
    
    
    
    39,471
    
    
    
    (21,143
    )
    
    
    271,212Gross margin
    
    
    
    
    
    $
    21,461
    
    
    $
    10,311
    
    
    $
    
    
    
    $
    31,772Year ended October 31, 2006Net sales
    
    
    
    
    
    $
    246,421
    
    
    $
    43,061
    
    
    $
    (15,759
    )
    
    $
    273,723Cost of sales
    
    
    
    
    
    
    227,748
    
    
    
    32,650
    
    
    
    (15,759
    )
    
    
    244,639Gross margin
    
    
    
    
    
    $
    18,673
    
    
    $
    10,411
    
    
    $
    
    
    
    $
    29,084Year 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
    
    
    $
    
    
    
    $
    21,734
  Year ended October 31, 2007Fresh
    
    
    Processedproducts
    
    
    products
    
    
    TotalThird-party sales:California avocados
    
    $
    95,130
    
    
    $
    
    
    
    $
    95,130Imported avocados
    
    
    120,588
    
    
    
    
    
    
    
    120,588Papayas
    
    
    5,887
    
    
    
    
    
    
    
    5,887Specialities and tropicals
    
    
    12,923
    
    
    
    
    
    
    
    12,923Processed  food service
    
    
    
    
    
    
    38,338
    
    
    
    38,338Processed  retail and club
    
    
    
    
    
    
    10,706
    
    
    
    10,706Total fruit and product sales to third-parties
    
    
    234,528
    
    
    
    49,044
    
    
    
    283,572Freight and other charges
    
    
    26,816
    
    
    
    739
    
    
    
    27,555Total third-party sales
    
    
    261,344
    
    
    
    49,783
    
    
    
    311,127Less sales incentives
    
    
    (19
    )
    
    
    (8,124
    )
    
    
    (8,143
    )Total net sales to third-parties
    
    
    261,325
    
    
    
    41,659
    
    
    
    302,984Intercompany sales
    
    
    13,020
    
    
    
    8,123
    
    
    
    21,143Net sales before eliminations
    
    $
    274,345
    
    
    $
    49,782
    
    
    
    324,127Intercompany sales eliminations
    
    
    
    
    
    
    
    
    
    
    (21,143
    )Consolidated net sales
    
    
    
    
    
    
    
    
    
    $
    302,984
 43




---



##### Table of Contents



Year ended October 31, 2006Fresh
    
    
    Processedproducts
    
    
    products
    
    
    TotalThird-party sales:California avocados
    
    $
    140,995
    
    
    $
    
    
    
    $
    140,995Imported avocados
    
    
    51,191
    
    
    
    
    
    
    
    51,191Papayas
    
    
    4,822
    
    
    
    
    
    
    
    4,822Specialities and tropicals
    
    
    9,543
    
    
    
    
    
    
    
    9,543Processed  food service
    
    
    
    
    
    
    34,021
    
    
    
    34,021Processed  retail and club
    
    
    
    
    
    
    10,454
    
    
    
    10,454Total fruit and product sales to third-parties
    
    
    206,551
    
    
    
    44,475
    
    
    
    251,026Freight and other charges
    
    
    30,383
    
    
    
    637
    
    
    
    31,020Total third-party sales
    
    
    236,934
    
    
    
    45,112
    
    
    
    282,046Less sales incentives
    
    
    (45
    )
    
    
    (8,278
    )
    
    
    (8,323
    )Total net sales to third-parties
    
    
    236,889
    
    
    
    36,834
    
    
    
    273,723Intercompany sales
    
    
    9,532
    
    
    
    6,227
    
    
    
    15,759Net sales before eliminations
    
    $
    246,421
    
    
    $
    43,061
    
    
    
    289,482Intercompany sales eliminations
    
    
    
    
    
    
    
    
    
    
    (15,759
    )Consolidated net sales
    
    
    
    
    
    
    
    
    
    $
    273,723
 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
  United States
    
    Mexico
    
    Consolidated2007
    
    $
    69,325
    
    
    $
    12,108
    
    
    $
    81,4332006
    
    $
    50,014
    
    
    $
    11,703
    
    
    $
    61,717
  44




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##### Table of Contents



12. Long-Term Obligations
  2007
    
    
    2006Farm Credit West, PCA, term loan
    
    $
    10,400
    
    
    $
    11,700Farm Credit West, PCA, long-term portion of revolving credit facility (Note 6)
    
    
    4,000
    
    
    
    Other
    
    
    13
    
    
    
    1414,413
    
    
    
    11,714Less current portion
    
    
    (1,307
    )
    
    
    (1,308
    )$
    13,106
    
    
    $
    10,406
    TotalYear ending October 31:2008
    
    $
    1,3072009
    
    
    2,3062010
    
    
    2,3002011
    
    
    2,3002012
    
    
    2,300Thereafter
    
    
    3,900$
    14,413
 13. Stock-Based Compensation
  The Directors Stock Option Plan
   Weighted-Average
    
    
    AggregateNumber of Shares
    
    
    Exercise Price
    
    
    Intrinsic ValueOutstanding at October 31, 2004
    
    
    155
    
    
    $
    5.65Exercised
    
    
    (55
    )
    
    $
    5.00Outstanding at October 31, 2005
    
    
    100
    
    
    $
    6.00Exercised
    
    
    (51
    )
    
    $
    5.04Outstanding at October 31, 2006
    
    
    49
    
    
    $
    7.00Outstanding at October 31, 2007
    
    
    49
    
    
    $
    7.00
    
    
    $
    780Exercisable at October 31, 2007
    
    
    49
    
    
    $
    7.00
    
    
    $
    780
   45




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##### Table of Contents



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
    Weighted-Average
    
    
    Weighted-Average
    
    
    AggregateNumber of Shares
    
    
    Exercise Price
    
    
    Fair-Value
    
    
    Intrinsic ValueOutstanding at October 31, 2004
    
    
    Granted
    
    
    400
    
    
    $
    9.10
    
    
    $1.65/shareOutstanding at October 31, 2005
    
    
    400
    
    
    $
    9.10Forfeited
    
    
    (9
    )
    
    $
    9.10Outstanding at October 31, 2006
    
    
    391
    
    
    $
    9.10Granted
    
    
    20
    
    
    $
    10.46
    
    
    $2.06/shareExercised
    
    
    (78
    )
    
    $
    9.10Outstanding at October 31, 2007
    
    
    333
    
    
    $
    9.18
    
    
    
    
    
    
    $
    4,572Exercisable at October 31, 2007
    
    
    313
    
    
    $
    9.10
    
    
    
    
    
    
    $
    4,323
  14. Dividends
  46




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##### Table of Contents



15. Joint Venture in Maui Fresh International, LLC
   16. Agreements with Tomato Grower
 Reporting
Revenue Gross as a Principal versus Net as an Agent
   17. Subsequent Events
    47




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48




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
       /s/ Ernst & Young LLP 
 49




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
     /s/ DELOITTE & TOUCHE LLP 
  50




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##### Table of Contents



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
 51




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Report of Independent Registered Public Accounting Firm
      .
  /s/ Ernst & Young LLP 
 52




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##### Table of Contents



Changes in Internal Control Over Financial Reporting
  
 Item 9B. Other Information
  
 PART III
  
 Item 10.
Directors, Executive Officers of the Registrant, and Corporate
Governance
   
    
    Information regarding our directors who are standing for reelection and any persons nominated to become our directors is set forth under Election of Directors.
    
    Information regarding our Audit Committee and designated audit committee financial expert is set forth under Corporate Governance Principles
and Board MattersBoard Structure and Committee CompositionAudit Committee.
    
    Information on our code of ethics for directors, officers and employees and our Corporate Governance Guidelines is set forth under Corporate Governance
 Principles and Board Matters.
    
    Information regarding Section 16(a) beneficial ownership reporting compliance is set forth under Section 16(a) Beneficial Ownership Reporting Compliance.
 
 Item 11. Executive Compensation
  
 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
  
 Item 13. Certain Relationships and Related Transactions, and Director Independence
  
 Item 14. Principal Accountants Fees and Services
  53




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##### Table of Contents



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 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.2
 54




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##### Table of Contents



ExhibitNumber
    
    Description10.14
    
    
    Term Revolving Credit Agreement between Farm Credit West, PCA and Calavo
Growers, Inc., dated June 7,
20071110.15
    
    
    Business Loan Agreement between Bank of America, N.A. and Calavo
Growers, Inc., dated October 15, 2007910.16
    
    
    Form of Stock Option
Agreement1021.1
    
    
    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 October 19, 2007 as an exhibit to the Registrants Report on Form 8K and incorporated herein by reference.10
    
    Previously filed on September 11, 2006 as an exhibit to
the Registrant's Report on Form 10Q and incorporated herein by
reference.11
    
    Previously filed on July 3, 2007 as an exhibit to the Registrants Report on Form 8K and incorporated herein by reference.   Financial Statement Schedules
  55




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##### Table of Contents



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
 56




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##### Table of Contents



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
    
    
    2005
    
    
    $
    1,022
    
    
    $
    6,791
    
    
    $
    5,663
    
    
    $
    2,1502006
    
    
    
    2,150
    
    
    
    5,147
    
    
    
    5,952
    
    
    
    1,3452007
    
    
    
    1,345
    
    
    
    6,449
    
    
    
    6,465
    
    
    
    1,329Allowance for doubtful accounts
    
    
    2005
    
    
    
    65
    
    
    
    475
    
    
    
    2
    
    
    
    5382006
    
    
    
    538
    
    
    
    56
    
    
    
    106
    
    
    
    4882007
    
    
    
    488
    
    
    
    473
    
    
    
    19
    
    
    
    942
 
 (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 57




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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
    
    
    Term Revolving Credit Agreement between Farm Credit West, PCA and Calavo
Growers, Inc., dated June 7,
20071110.15
    
    
    Business Loan Agreement between Bank of America, N.A. and Calavo
Growers, Inc., dated October 15, 2007910.16
    
    
    Form of Stock Option
Agreement1021.1
    
    
    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. 58




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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 October 19, 2007 as an exhibit to the Registrants Report on Form 8K and incorporated herein by reference.10
    
    Previously filed on September 11, 2006 as an exhibit to
the Registrants Report on Form 10Q and incorporated herein
by reference.11
    
    Previously filed on July 3, 2007 as an exhibit to the Registrants Report on Form 8K and incorporated herein by reference. 59