##### Table of Contents



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, 2010
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 Commission file number: 000-33385
 CALAVO GROWERS, INC.
  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
 o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 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. [Removed and Reserved.]PART 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, 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 SchedulesSIGNATURESEX-10.18EX-23.1EX-31.1EX-31.2EX-32    Table of Contents  CAUTIONARY STATEMENT
  2




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PART I
 
 Item 1. Business
 General development of the business
     6
   3




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Available information
  Fresh products
       4




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th st
  5




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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 fairly 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.
  CalavoFoods
     6




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rd
   Sales and Other Financial Information by Business Segment and Product Category
  Patents and Trademarks
  Working Capital Requirements
    Backlog
  Research and Development
  7




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Compliance with Government Regulations
     Employees
   Location
    
    Salaried
    
    
    Hourly
    
    
    TotalUnited States
    
    
    116
    
    
    
    312
    
    
    
    428Mexico
    
    
    126
    
    
    
    603
    
    
    
    729TOTAL
    
    
    242
    
    
    
    915
    
    
    
    1,157
 8




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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, 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.
    
    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; and
    
    Changes in legal or regulatory requirements affecting foreign investment, loans, taxes,
imports, and exports
 Currency exchange fluctuations may impact the results of our operations.
  We and our growers are subject to the risks that are inherent in farming.
  Our earnings are sensitive to fluctuations in market prices and demand for our products.
  9




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Increases in commodity or raw product costs, such as fuel, and paper, could adversely affect our
operating results.
    We are subject to the risk of product liability claims.
  We are subject to possible changing USDA and FDA regulations which govern the importation of
foreign avocados into the United States and the processing of processed avocado products.
   10




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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.
  We depend on our key personnel and if we lose the services of any of these individuals, or fail to
attract and retain additional key personnel, we may not be able to implement our business strategy
or operate our business effectively.
  A portion of our workforce is unionized and labor disruptions could decrease our profitability.
  Risks Related to Our Common Stock
 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;
 Our ability to raise capital in the future may be limited, and our failure to raise capital when
needed could prevent us from executing our growth strategy.
  
    
    Market acceptance of our products; and
    
    The existence of opportunities for expansion.
  11




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Item 1B. Unresolved Staff Comments
  
 Item 2. Properties
  United States Locations
        Mexico Locations
   12




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Item 3. Legal Proceedings
  
 Item 4. [Removed and Reserved.]
 Executive Officers of the Registrant
  Name
    
    Age
    
    PositionLecil E. Cole
    
    
    71
    
    
    Chairman of the Board, Chief Executive Officer and PresidentArthur J. Bruno
    
    
    60
    
    
    Chief Operating Officer, Chief Financial Officer and Corporate SecretaryRobert J. Wedin
    
    
    61
    
    
    Vice President, Sales and Fresh MarketingAlan C. Ahmer
    
    
    62
    
    
    Vice President, Processed Product Sales and ProductionMichael A. Browne
    
    
    52
    
    
    Vice President, Fresh Operations
 Lecil E. Cole
 Arthur J. Bruno
 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
  13




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Fiscal 2010
    
    High
    
    
    LowFirst Quarter
    
    $
    18.58
    
    
    $
    14.99Second Quarter
    
    $
    18.74
    
    
    $
    15.85Third Quarter
    
    $
    21.06
    
    
    $
    15.25Fourth Quarter
    
    $
    21.83
    
    
    $
    18.68
 Fiscal 2009
    
    High
    
    
    LowFirst Quarter
    
    $
    13.34
    
    
    $
    5.93Second Quarter
    
    $
    14.49
    
    
    $
    10.22Third Quarter
    
    $
    20.01
    
    
    $
    11.82Fourth Quarter
    
    $
    20.30
    
    
    $
    16.29
   Dividend Policy
    14




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Item 6. Selected Financial Data
 SELECTED CONSOLIDATED FINANCIAL DATA
   Fiscal Year Ended October 31,2010
    
    
    2009
    
    
    2008
    
    
    2007
    
    
    2006(In thousands, except per share data)Income Statement Data: (1)(2)Net sales
    
    $
    398,351
    
    
    $
    344,765
    
    
    $
    361,474
    
    
    $
    302,984
    
    
    $
    273,723Gross margin
    
    
    51,530
    
    
    
    44,533
    
    
    
    33,181
    
    
    
    31,772
    
    
    
    29,084Net income
    
    
    17,640
    
    
    
    13,611
    
    
    
    7,725
    
    
    
    7,330
    
    
    
    5,788Basic net income per share
    
    $
    1.22
    
    
    $
    0.94
    
    
    $
    0.54
    
    
    $
    0.51
    
    
    $
    0.40Diluted net income per share
    
    $
    1.22
    
    
    $
    0.94
    
    
    $
    0.53
    
    
    $
    0.51
    
    
    $
    0.40Balance Sheet Data as of End of Period:Working capital
    
    $
    14,801
    
    
    $
    12,052
    
    
    $
    15,413
    
    
    $
    16,334
    
    
    $
    12,023Total assets
    
    
    150,198
    
    
    
    122,749
    
    
    
    134,422
    
    
    
    127,920
    
    
    
    107,563Current portion of long-term obligations
    
    
    1,369
    
    
    
    1,366
    
    
    
    1,362
    
    
    
    1,307
    
    
    
    1,308Long-term debt, less current portion
    
    
    6,089
    
    
    
    13,908
    
    
    
    25,351
    
    
    
    13,106
    
    
    
    10,406Shareholders equity
    
    
    88,257
    
    
    
    69,487
    
    
    
    65,517
    
    
    
    74,003
    
    
    
    58,943Cash Flows Provided by (Used in):Operations
    
    $
    18,198
    
    
    $
    21,997
    
    
    $
    5,296
    
    
    $
    4,629
    
    
    $
    7,819Investing(3)
    
    
    (7,721
    )
    
    
    (5,990
    )
    
    
    (7,454
    )
    
    
    (7,950
    )
    
    
    (4,663
    )Financing
    
    
    (10,288
    )
    
    
    (16,641
    )
    
    
    2,700
    
    
    
    4,238
    
    
    
    (4,239
    )Other Data:Dividends declared per share
    
    $
    0.55
    
    
    $
    0.50
    
    
    $
    0.35
    
    
    $
    0.35
    
    
    $
    0.32Net book value per share
    
    $
    6.04
    
    
    $
    4.79
    
    
    $
    4.52
    
    
    $
    5.15
    
    
    $
    4.12Pounds of California avocados sold
    
    
    170,650
    
    
    
    53,000
    
    
    
    92,165
    
    
    
    91,038
    
    
    
    218,460Pounds of non-California avocados sold
    
    
    123,700
    
    
    
    162,950
    
    
    
    123,740
    
    
    
    135,723
    
    
    
    70,063Pounds of processed avocados products sold
    
    
    21,651
    
    
    
    21,259
    
    
    
    22,274
    
    
    
    22,556
    
    
    
    20,489
 
 (1)
    
    Operating results for fiscal 2010 include the acquisitions of Calavo Salsa Lisa from the date
of acquisition of February 8, 2010. For fiscal year 2010, Calavo Salsa Lisas net sales and
gross losses were $0.8 million and $0.4 million. Net loss was not significant. See Note 16
to our consolidated financial statements for further discussion of these acquisitions.(2)
    
    Operating results for fiscal 2010, 2009 and 2008 include the acquisitions of HS and HP. Such
acquisitions, however, did not significantly impact trends or results of operations for fiscal
2008, as such acquisitions substantially replaced the previous consigned arrangement.(3)
    
    For fiscal years 2010 and 2009, we have not made any infrastructure advances to Agricola
Belher. Agricola Belher paid $1.8 million and $0.5 million in fiscal years 2010 and 2009
related to infrastructure advances. 15




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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
      Recent Developments
 Dividend Payment
  16




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Earn-Out Payment
  Contingencies
 Hacienda Suits
      Acquisition
  Critical Accounting Estimates
  17




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Promotional allowances .
 Income Taxes .
   Goodwill and acquired intangible assets
 18




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Allowance for accounts receivable
 Results of Operations
  Year ended October 31,2010
    
    2009
    
    2008Net sales
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Gross margins
    
    
    12.9
    %
    
    
    12.9
    %
    
    
    9.2
    %Selling, general and administrative
    
    
    5.8
    %
    
    
    6.6
    %
    
    
    5.8
    %Operating income
    
    
    7.1
    %
    
    
    6.3
    %
    
    
    3.4
    %Interest income
    
    
    0.1
    %
    
    
    0.1
    %
    
    
    0.1
    %Interest expense
    
    
    (0.2
    )%
    
    
    (0.3
    )%
    
    
    (0.4
    )%Other income, net
    
    
    0.1
    %
    
    
    0.1
    %
    
    
    0.2
    %Net income
    
    
    4.4
    %
    
    
    3.9
    %
    
    
    2.1
    %
 Net Sales
      19




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Year ended October 31, 2010
    
    
    Year ended October 31, 2009Fresh
    
    
    Calavo-
    
    
    
    
    
    
    Fresh
    
    
    Calavo-products
    
    
    Foods
    
    
    Total
    
    
    products
    
    
    Foods
    
    
    TotalThird-party sales:Avocados
    
    $
    287,808
    
    
    $
    
    
    
    $
    287,808
    
    
    $
    259,558
    
    
    $
    
    
    
    $
    259,558Tomatoes
    
    
    41,595
    
    
    
    
    
    
    
    41,595
    
    
    
    14,067
    
    
    
    
    
    
    
    14,067Papayas
    
    
    11,278
    
    
    
    
    
    
    
    11,278
    
    
    
    9,118
    
    
    
    
    
    
    
    9,118Pineapples
    
    
    3,838
    
    
    
    
    
    
    
    3,838
    
    
    
    13,341
    
    
    
    
    
    
    
    13,341Other Fresh products
    
    
    3,617
    
    
    
    
    
    
    
    3,617
    
    
    
    4,219
    
    
    
    
    
    
    
    4,219CalavoFoods  food service
    
    
    
    
    
    
    40,654
    
    
    
    40,654
    
    
    
    
    
    
    
    36,493
    
    
    
    36,493CalavoFoods  retail and club
    
    
    
    
    
    
    17,473
    
    
    
    17,473
    
    
    
    
    
    
    
    15,554
    
    
    
    15,554Total gross sales
    
    
    348,136
    
    
    
    58,127
    
    
    
    406,263
    
    
    
    300,303
    
    
    
    52,047
    
    
    
    352,350Less sales incentives
    
    
    (84
    )
    
    
    (7,828
    )
    
    
    (7,912
    )
    
    
    (68
    )
    
    
    (7,517
    )
    
    
    (7,585
    )Net sales
    
    $
    348,052
    
    
    $
    50,299
    
    
    $
    398,351
    
    
    $
    300,235
    
    
    $
    44,530
    
    
    $
    344,765
 Year ended October 31, 2009
    
    
    Year ended October 31, 2008Fresh
    
    
    Calavo-
    
    
    
    
    
    
    Fresh
    
    
    Calavo-products
    
    
    Foods
    
    
    Total
    
    
    products
    
    
    Foods
    
    
    TotalThird-party sales:Avocados
    
    $
    259,558
    
    
    $
    
    
    
    $
    259,558
    
    
    $
    268,674
    
    
    $
    
    
    
    $
    268,674Tomatoes
    
    
    14,067
    
    
    
    
    
    
    
    14,067
    
    
    
    19,666
    
    
    
    
    
    
    
    19,666Papayas
    
    
    9,118
    
    
    
    
    
    
    
    9,118
    
    
    
    8,392
    
    
    
    
    
    
    
    8,392Pineapples
    
    
    13,341
    
    
    
    
    
    
    
    13,341
    
    
    
    16,442
    
    
    
    
    
    
    
    16,442Other Fresh products
    
    
    4,219
    
    
    
    
    
    
    
    4,219
    
    
    
    2,564
    
    
    
    
    
    
    
    2,564CalavoFoods  food service
    
    
    
    
    
    
    36,493
    
    
    
    36,493
    
    
    
    
    
    
    
    38,919
    
    
    
    38,919CalavoFoods  retail and club
    
    
    
    
    
    
    15,554
    
    
    
    15,554
    
    
    
    
    
    
    
    14,634
    
    
    
    14,634Total gross sales
    
    
    300,303
    
    
    
    52,047
    
    
    
    352,350
    
    
    
    315,738
    
    
    
    53,553
    
    
    
    369,291Less sales incentives
    
    
    (68
    )
    
    
    (7,517
    )
    
    
    (7,585
    )
    
    
    (71
    )
    
    
    (7,746
    )
    
    
    (7,817
    )Net sales
    
    $
    300,235
    
    
    $
    44,530
    
    
    $
    344,765
    
    
    $
    315,667
    
    
    $
    45,807
    
    
    $
    361,474
   2010
    
    
    Change
    
    
    2009
    
    
    Change
    
    
    2008(Dollars in thousands)Net sales:Fresh products
    
    $
    348,052
    
    
    
    15.9
    %
    
    $
    300,235
    
    
    
    (4.9
    %)
    
    $
    315,667CalavoFoods
    
    
    50,299
    
    
    
    13.0
    %
    
    
    44,530
    
    
    
    (2.8
    %)
    
    
    45,807Total net sales
    
    $
    398,351
    
    
    
    15.5
    %
    
    $
    344,765
    
    
    
    (4.6
    %)
    
    $
    361,474As a percentage of net sales:Fresh products
    
    
    87.4
    %
    
    
    
    
    
    
    87.1
    %
    
    
    
    
    
    
    87.3
    %CalavoFoods
    
    
    12.6
    %
    
    
    
    
    
    
    12.9
    %
    
    
    
    
    
    
    12.7
    %100.0
    %
    
    
    
    
    
    
    100.0
    %
    
    
    
    
    
    
    100.0
    %
  Fresh products
   20




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CalavoFoods
   rd rd
  22




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Gross Margins
  2010
    
    
    Change
    
    
    2009
    
    
    Change
    
    
    2008(Dollars in thousands)Gross Margins:Fresh products
    
    $
    38,443
    
    
    
    32.2
    %
    
    $
    29,076
    
    
    
    30.8
    %
    
    $
    22,223CalavoFoods
    
    
    13,087
    
    
    
    (15.3
    %)
    
    
    15,457
    
    
    
    41.1
    %
    
    
    10,958Total gross margins
    
    $
    51,530
    
    
    
    15.7
    %
    
    $
    44,533
    
    
    
    34.2
    %
    
    $
    33,181Gross profit percentages:Fresh products
    
    
    11.0
    %
    
    
    
    
    
    
    9.7
    %
    
    
    
    
    
    
    7.0
    %CalavoFoods
    
    
    26.0
    %
    
    
    
    
    
    
    34.7
    %
    
    
    
    
    
    
    23.9
    %Consolidated
    
    
    12.9
    %
    
    
    
    
    
    
    12.9
    %
    
    
    
    
    
    
    9.2
    %
  Fresh products
     23




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CalavoFoods
   24




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Selling, General and Administrative
 2010
    
    Change
    
    2009
    
    Change
    
    2008(Dollars in thousands)Selling, general and administrative
    
    $
    23,168
    
    
    
    1.7
    %
    
    $
    22,791
    
    
    
    9.0
    %
    
    $
    20,914Percentage of net sales
    
    
    5.8
    %
    
    
    
    
    
    
    6.6
    %
    
    
    
    
    
    
    5.8
    %
   Interest income
 2010
    
    Change
    
    2009
    
    Change
    
    2008(Dollars in thousands)Interest income
    
    $
    274
    
    
    
    (28.1
    %)
    
    $
    381
    
    
    
    (26.2
    %)
    
    $
    516Percentage of net sales
    
    
    0.1
    %
    
    
    
    
    
    
    0.1
    %
    
    
    
    
    
    
    0.1
    %
  Interest expense
 2010
    
    Change
    
    2009
    
    Change
    
    2008(Dollars in thousands)Interest expense
    
    $
    (834
    )
    
    
    (24.7
    %)
    
    $
    (1,108
    )
    
    
    (25.4
    %)
    
    $
    (1,485
    )Percentage of net sales
    
    
    (0.2
    %)
    
    
    
    
    
    
    (0.3
    %)
    
    
    
    
    
    
    (0.4
    %)
   25




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##### Table of Contents



Other Income, Net
 2010
    
    Change
    
    2009
    
    Change
    
    2008(Dollars in thousands)Other income, net
    
    $
    430
    
    
    
    63.5
    
    
    $
    263
    
    
    
    (63.2
    %)
    
    $
    715Percentage of net sales
    
    
    0.1
    %
    
    
    
    
    
    
    0.1
    %
    
    
    
    
    
    
    0.2
    %
  Provision for Income Taxes
 2010
    
    Change
    
    2009
    
    Change
    
    2008(Dollars in thousands)Provision for income taxes
    
    $
    11,341
    
    
    
    35.4
    %
    
    $
    8,277
    
    
    
    81.2
    %
    
    $
    4,567Percentage of income before
provision for income taxes
    
    
    39.1
    %
    
    
    
    
    
    
    37.8
    %
    
    
    
    
    
    
    37.2
    %
  Quarterly Results of Operations
  Three months endedOct. 31,
    
    
    July 31,
    
    
    Apr. 30,
    
    
    Jan. 31,
    
    
    Oct. 31,
    
    
    July 31,
    
    
    Apr. 30,
    
    
    Jan. 31,2010
    
    
    2010
    
    
    2010
    
    
    2010
    
    
    2009
    
    
    2009
    
    
    2009
    
    
    2009(in thousands, except per share amounts)Statement of Operations DataNet sales
    
    $
    107,234
    
    
    $
    114,578
    
    
    $
    109,219
    
    
    $
    67,320
    
    
    $
    80,942
    
    
    $
    106,347
    
    
    $
    86,829
    
    
    $
    70,647Cost of sales
    
    
    92,940
    
    
    
    99,303
    
    
    
    96,133
    
    
    
    58,445
    
    
    
    71,713
    
    
    
    96,441
    
    
    
    73,890
    
    
    
    58,188Gross margin
    
    
    14,294
    
    
    
    15,275
    
    
    
    13,086
    
    
    
    8,875
    
    
    
    9,229
    
    
    
    9,906
    
    
    
    12,939
    
    
    
    12,459Selling, general and administrative
    
    
    7,035
    
    
    
    5,514
    
    
    
    5,455
    
    
    
    5,164
    
    
    
    6,134
    
    
    
    5,822
    
    
    
    5,535
    
    
    
    5,300Operating income
    
    
    7,259
    
    
    
    9,761
    
    
    
    7,631
    
    
    
    3,711
    
    
    
    3,095
    
    
    
    4,084
    
    
    
    7,404
    
    
    
    7,159Other income (expense), net
    
    
    169
    
    
    
    181
    
    
    
    233
    
    
    
    36
    
    
    
    164
    
    
    
    (22
    )
    
    
    75
    
    
    
    (71
    )Income before provision
for income taxes
    
    
    7,428
    
    
    
    9,942
    
    
    
    7,864
    
    
    
    3,747
    
    
    
    3,259
    
    
    
    4,062
    
    
    
    7,479
    
    
    
    7,088Provision for income taxes
    
    
    2,733
    
    
    
    4,045
    
    
    
    3,090
    
    
    
    1,473
    
    
    
    955
    
    
    
    1,597
    
    
    
    3,017
    
    
    
    2,708Net income
    
    
    4,695
    
    
    
    5,897
    
    
    
    4,774
    
    
    
    2,274
    
    
    
    2,304
    
    
    
    2,465
    
    
    
    4,462
    
    
    
    4,380Add: Net loss-noncontrolling interest
    
    
    55
    
    
    
    50
    
    
    
    19
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net income-Calavo Growers, Inc
    
    $
    4,750
    
    
    $
    5,947
    
    
    $
    4,793
    
    
    $
    2,274
    
    
    $
    2,304
    
    
    $
    2,465
    
    
    $
    4,462
    
    
    $
    4,380Basic
    
    $
    0.32
    
    
    $
    0.41
    
    
    $
    0.33
    
    
    $
    0.16
    
    
    $
    0.16
    
    
    $
    0.17
    
    
    $
    0.31
    
    
    $
    0.30Diluted
    
    $
    0.32
    
    
    $
    0.41
    
    
    $
    0.33
    
    
    $
    0.16
    
    
    $
    0.16
    
    
    $
    0.17
    
    
    $
    0.31
    
    
    $
    0.30Number of shares used in per share
computation:Basic
    
    
    14,710
    
    
    
    14,651
    
    
    
    14,572
    
    
    
    14,505
    
    
    
    14,505
    
    
    
    14,457
    
    
    
    14,423
    
    
    
    14,419Diluted
    
    
    14,722
    
    
    
    14,676
    
    
    
    14,598
    
    
    
    14,572
    
    
    
    14,582
    
    
    
    14,529
    
    
    
    14,508
    
    
    
    14,429
 Liquidity and Capital Resources
  26




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##### Table of Contents



Payments due by periodContractual Obligations
    
    Total
    
    
    Less than 1 year
    
    
    1-3 years
    
    
    3-5 years
    
    
    More than 5 yearsLong-term debt obligations
(including interest)
    
    $
    8,768
    
    
    $
    1,781
    
    
    $
    3,340
    
    
    $
    3,045
    
    
    $
    602Revolving credit facilities
    
    
    8,150
    
    
    
    8,150
    
    
    
    
    
    
    
    
    
    
    
    Defined benefit plan
    
    
    275
    
    
    
    42
    
    
    
    84
    
    
    
    84
    
    
    
    65Operating lease commitments
    
    
    11,492
    
    
    
    1,480
    
    
    
    2,743
    
    
    
    2,513
    
    
    
    4,756Total
    
    $
    28,685
    
    
    $
    11,453
    
    
    $
    6,167
    
    
    $
    5,642
    
    
    $
    5,423
  27




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##### Table of Contents



Recently Adopted Accounting Pronouncements
  
    
    The period after the balance sheet date during which management of a reporting entity
should evaluate events or transactions that may occur for potential recognition or
disclosure in the financial statements.
    
    The circumstances under which an entity should recognize events or transactions
occurring after the balance sheet date in its financial statements.
    
    The disclosures that should be made about events or transactions that occurred after the
balance sheet date.
       28




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##### Table of Contents



Recently Issued Accounting Standards
   
 Item 7A. Quantitative and Qualitative Disclosures About Market Risk
  Expected maturity date October 31,(All amounts in thousands)
    
    2011
    
    
    2012
    
    
    2013
    
    
    2014
    
    
    2015
    
    
    Thereafter
    
    
    Total
    
    
    Fair ValueAssetsCash and cash equivalents (1)
    
    $
    1,064
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    1,064
    
    
    $
    1,064Accounts receivable (1)
    
    
    31,743
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    31,743
    
    
    
    31,743Advances to suppliers (1)
    
    
    1,598
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,598
    
    
    
    1,598LiabilitiesPayable to growers (1)
    
    $
    11,208
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    11,208
    
    
    $
    11,208Accounts payable (1)
    
    
    2,839
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,839
    
    
    
    2,839Current borrowings pursuant to credit
facilities (1)
    
    
    7,150
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,150
    
    
    
    7,150Current long-term borrowings
pursuant to credit facilities (2)
    
    
    1,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,000
    
    
    
    1,024Fixed-rate long-term obligations (3)
    
    
    1,369
    
    
    
    1,373
    
    
    
    1,376
    
    
    
    1,380
    
    
    
    1,383
    
    
    
    577
    
    
    
    7,458
    
    
    
    8,082
 
 (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)
    
    Current long-term borrowings pursuant to our credit facility bears interest at 6.5%.
We believe that a portfolio of loans with a similar risk profile would currently yield a
return of 4.0%. We project the impact of an increase or decrease in interest rates of 100
basis points would result in a change of fair value by approximately $10,000.(3)
    
    Fixed-rate long-term obligations bear interest rates ranging from 4.3% to 5.7% with a
weighted-average interest rate of 5.5%. We believe that loans with a similar risk profile
would currently yield a return of 2.5%. 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 $235,000.   29




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##### Table of Contents



Item 8. Financial Statements and Supplementary Data
 CALAVO GROWERS, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
 October 31,2010
    
    
    2009AssetsCurrent assets:Cash and cash equivalents
    
    $
    1,064
    
    
    $
    875Accounts
receivable, net of allowances of $1,372 (2010) and $2,353 (2009)
    
    
    31,743
    
    
    
    22,314Inventories, net
    
    
    14,831
    
    
    
    11,731Prepaid expenses and other current assets
    
    
    8,424
    
    
    
    6,430Advances to suppliers
    
    
    1,598
    
    
    
    2,623Income taxes receivable
    
    
    1,816
    
    
    
    2,178Deferred income taxes
    
    
    2,336
    
    
    
    2,728Total current assets
    
    
    61,812
    
    
    
    48,879Property, plant, and equipment, net
    
    
    41,059
    
    
    
    38,621Investment in Limoneira Company
    
    
    34,986
    
    
    
    24,200Investment in unconsolidated entities
    
    
    2,016
    
    
    
    1,382Goodwill
    
    
    4,085
    
    
    
    3,591Other assets
    
    
    6,240
    
    
    
    6,076$
    150,198
    
    
    $
    122,749Liabilities and shareholders equityCurrent liabilities:Payable to growers
    
    $
    11,208
    
    
    $
    4,343Trade accounts payable
    
    
    2,839
    
    
    
    2,223Accrued expenses
    
    
    15,353
    
    
    
    16,123Short-term borrowings
    
    
    8,150
    
    
    
    5,520Dividend payable
    
    
    8,092
    
    
    
    7,252Current portion of long-term obligations
    
    
    1,369
    
    
    
    1,366Total current liabilities
    
    
    47,011
    
    
    
    36,827Long-term liabilities:Long-term obligations, less current portion
    
    
    6,089
    
    
    
    13,908Deferred income taxes
    
    
    8,266
    
    
    
    2,527Total long-term liabilities
    
    
    14,355
    
    
    
    16,435Commitments and contingenciesNoncontrolling interest
    
    
    575
    
    
    
    Shareholders equity:Common stock
($0.001 par value, 100,000 shares authorized; 14,712 and 14,505
shares outstanding at October 31, 2010 and 2009)
    
    
    14
    
    
    
    14Additional paid-in capital
    
    
    42,319
    
    
    
    39,714Accumulated other comprehensive income
    
    
    6,959
    
    
    
    466Retained earnings
    
    
    38,965
    
    
    
    29,293Total shareholders equity
    
    
    88,257
    
    
    
    69,487$
    150,198
    
    
    $
    122,749
 See accompanying notes to consolidated financial statements.
 30




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##### Table of Contents



CALAVO GROWERS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
 Year Ended October 31,2010
    
    
    2009
    
    
    2008Net sales
    
    $
    398,351
    
    
    $
    344,765
    
    
    $
    361,474Cost of sales
    
    
    346,821
    
    
    
    300,232
    
    
    
    328,293Gross margin
    
    
    51,530
    
    
    
    44,533
    
    
    
    33,181Selling, general and administrative
    
    
    23,168
    
    
    
    22,791
    
    
    
    20,914Operating income
    
    
    28,362
    
    
    
    21,742
    
    
    
    12,267Equity in earnings from unconsolidated entities
    
    
    749
    
    
    
    610
    
    
    
    279Interest income
    
    
    274
    
    
    
    381
    
    
    
    516Interest expense
    
    
    (834
    )
    
    
    (1,108
    )
    
    
    (1,485
    )Other income, net
    
    
    430
    
    
    
    263
    
    
    
    715Income before provision for income taxes
    
    
    28,981
    
    
    
    21,888
    
    
    
    12,292Provision for income taxes
    
    
    11,341
    
    
    
    8,277
    
    
    
    4,567Net Income
    
    
    17,640
    
    
    
    13,611
    
    
    
    7,725Add: Net
loss attributable to noncontrolling interest
    
    
    124
    
    
    
    
    
    
    
    Net income attributable to Calavo Growers, Inc.
    
    $
    17,764
    
    
    $
    13,611
    
    
    $
    7,725Calavo Growers, Inc.s net income per share:Basic
    
    $
    1.22
    
    
    $
    0.94
    
    
    $
    0.54Diluted
    
    $
    1.22
    
    
    $
    0.94
    
    
    $
    0.53Number of shares used in per share computation:Basic
    
    
    14,610
    
    
    
    14,451
    
    
    
    14,398Diluted
    
    
    14,619
    
    
    
    14,503
    
    
    
    14,481
 See accompanying notes to consolidated financial statements.
 31




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##### Table of Contents



CALAVO GROWERS, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(in thousands)
 Year endedOctober 31,2010
    
    
    2009
    
    
    2008Net income
    
    $
    17,640
    
    
    $
    13,611
    
    
    $
    7,725Other comprehensive income (loss), before tax:Unrealized holding gains (losses) arising during period
    
    
    10,786
    
    
    
    (5,704
    )
    
    
    (19,058
    )Income tax benefit (expense) related to items of other
comprehensive income (loss)
    
    
    (4,293
    )
    
    
    2,227
    
    
    
    7,337Other comprehensive income (loss), net of tax
    
    
    6,493
    
    
    
    (3,477
    )
    
    
    (11,721
    )Comprehensive income (loss)
    
    
    24,133
    
    
    
    10,134
    
    
    
    (3,996
    )Add: Net loss attributable to noncontrolling interest
    
    
    124
    
    
    
    
    
    
    
    Comprehensive income (loss)  Calavo Growers, Inc.
    
    $
    24,257
    
    
    $
    10,134
    
    
    $
    (3,996
    )
 See accompanying notes to consolidated financial statements.
 32




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##### Table of Contents



CALAVO GROWERS, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
(in thousands)
 AccumulatedAdditional
    
    
    OtherCommon Stock
    
    
    Paid-in
    
    
    Comprehensive
    
    
    RetainedShares
    
    
    Amount
    
    
    Capital
    
    
    Income
    
    
    Earnings
    
    
    TotalBalance, October 31, 2007
    
    
    14,371
    
    
    
    14
    
    
    
    38,068
    
    
    
    15,664
    
    
    
    20,257
    
    
    
    74,003Exercise of stock options and
income tax benefit of $147
    
    
    48
    
    
    
    
    
    
    
    534
    
    
    
    
    
    
    
    
    
    
    
    534Stock compensation expense
    
    
    
    
    
    
    
    
    
    
    24
    
    
    
    
    
    
    
    
    
    
    
    24Unrealized loss on Limoneira investment, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,721
    )
    
    
    
    
    
    
    (11,721
    )Dividend declared to shareholders
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,048
    )
    
    
    (5,048
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,725
    
    
    
    7,725Balance, October 31, 2008
    
    
    14,419
    
    
    
    14
    
    
    
    38,626
    
    
    
    3,943
    
    
    
    22,934
    
    
    
    65,517Exercise of stock options and
income tax benefit of $261
    
    
    86
    
    
    
    
    
    
    
    1,044
    
    
    
    
    
    
    
    
    
    
    
    1,044Stock compensation expense
    
    
    
    
    
    
    
    
    
    
    44
    
    
    
    
    
    
    
    
    
    
    
    44Unrealized loss on Limoneira investment, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,477
    )
    
    
    
    
    
    
    (3,477
    )Dividend declared to shareholders
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,252
    )
    
    
    (7,252
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,611
    
    
    
    13,611Balance, October 31, 2009
    
    
    14,505
    
    
    
    14
    
    
    
    39,714
    
    
    
    466
    
    
    
    29,293
    
    
    
    69,487Exercise of stock options and
income tax benefit of $664
    
    
    207
    
    
    
    
    
    
    
    2,553
    
    
    
    
    
    
    
    
    
    
    
    2,553Stock compensation expense
    
    
    
    
    
    
    
    
    
    
    52
    
    
    
    
    
    
    
    
    
    
    
    52Unrealized gain on Limoneira investment, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,493
    
    
    
    
    
    
    
    6,493Dividend declared to shareholders
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8,092
    )
    
    
    (8,092
    )Net income attributable to Calavo Growers,
Inc.
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17,764
    
    
    
    17,764Balance, October 31, 2010
    
    
    14,712
    
    
    $
    14
    
    
    $
    42,319
    
    
    $
    6,959
    
    
    $
    38,965
    
    
    $
    88,257
 See accompanying notes to consolidated financial statements.
 33




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##### Table of Contents



CALAVO GROWERS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
 Year Ended October 31,2010
    
    
    2009
    
    
    2008Cash Flows from Operating Activities:Net income
    
    $
    17,640
    
    
    $
    13,611
    
    
    $
    7,725Adjustments to reconcile net income to net cash provided by
operating activities:Depreciation and amortization
    
    
    3,368
    
    
    
    3,054
    
    
    
    2,657Provision for losses on accounts receivable
    
    
    38
    
    
    
    106
    
    
    
    20Income from unconsolidated entities
    
    
    (750
    )
    
    
    (610
    )
    
    
    (279
    )Interest on deferred consideration
    
    
    62
    
    
    
    152
    
    
    
    75Stock compensation expense
    
    
    52
    
    
    
    44
    
    
    
    24Loss on disposal of property, plant, and equipment
    
    
    
    
    
    
    
    
    
    
    70Deferred income taxes
    
    
    1,332
    
    
    
    (215
    )
    
    
    940Effect on cash of changes in operating assets and liabilities:Accounts receivable
    
    
    (9,353
    )
    
    
    5,297
    
    
    
    (1,400
    )Inventories, net
    
    
    (3,006
    )
    
    
    3,158
    
    
    
    (5,587
    )Prepaid expenses and other current assets
    
    
    (2,544
    )
    
    
    (963
    )
    
    
    1Advances to suppliers
    
    
    1,025
    
    
    
    219
    
    
    
    (549
    )Income taxes receivable
    
    
    765
    
    
    
    (1,072
    )
    
    
    461Other assets
    
    
    (25
    )
    
    
    (113
    )
    
    
    171Payable to growers
    
    
    6,865
    
    
    
    (602
    )
    
    
    919Trade accounts payable and accrued expenses
    
    
    2,729
    
    
    
    (69
    )
    
    
    48Net cash provided by operating activities
    
    
    18,198
    
    
    
    21,997
    
    
    
    5,296Cash Flows from Investing Activities:Acquisitions of property, plant, and equipment
    
    
    (4,767
    )
    
    
    (4,149
    )
    
    
    (2,674
    )Loan to Agricola Belher
    
    
    
    
    
    
    
    
    
    
    (750
    )Collections from Agricola Belher
    
    
    1,781
    
    
    
    507
    
    
    
    1,000Distribution from unconsolidated entity
    
    
    116
    
    
    
    
    
    
    
    Acquisition of Hawaiian Sweet and Pride, net of cash acquired
    
    
    (4,500
    )
    
    
    (2,348
    )
    
    
    (5,030
    )Acquisition of Calavo Salsa Lisa, net of cash acquired
    
    
    (351
    )
    
    
    
    
    
    
    Net cash used in investing activities
    
    
    (7,721
    )
    
    
    (5,990
    )
    
    
    (7,454
    )Cash Flows from Financing Activities:Dividend paid to shareholders
    
    
    (7,252
    )
    
    
    (5,047
    )
    
    
    (5,031
    )Proceeds (repayments) from (on) line of credit borrowings, net
    
    
    1,580
    
    
    
    (11,160
    )
    
    
    8,500Payments on long-term obligations
    
    
    (6,766
    )
    
    
    (1,364
    )
    
    
    (1,389
    )Proceeds from stock option exercises
    
    
    1,889
    
    
    
    783
    
    
    
    387Tax benefit of stock option exercises
    
    
    261
    
    
    
    147
    
    
    
    233Net cash provided by (used in) financing activities
    
    
    (10,288
    )
    
    
    (16,641
    )
    
    
    2,700Net increase (decrease) in cash and cash equivalents
    
    
    189
    
    
    
    (634
    )
    
    
    542Cash and cash equivalents, beginning of year
    
    
    875
    
    
    
    1,509
    
    
    
    967Cash and cash equivalents, end of year
    
    $
    1,064
    
    
    $
    875
    
    
    $
    1,509Supplemental Information -Cash paid during the year for:Interest
    
    $
    850
    
    
    $
    1,195
    
    
    $
    1,455Income taxes
    
    $
    8,845
    
    
    $
    8,803
    
    
    $
    2,504Noncash Investing and Financing Activities:Tax receivable increase related to stock option exercise
    
    $
    664
    
    
    $
    261
    
    
    $
    147Declared dividends payable
    
    $
    8,092
    
    
    $
    7,252
    
    
    $
    5,047Construction in progress included in trade accounts payable and accrued expenses
    
    $
    32
    
    
    $
    245
    
    
    $
    259Capital lease obligations
    
    $
    
    
    
    $
    
    
    
    $
    1,125Fixed asset acquired with long term debt
    
    $
    
    
    
    $
    
    
    
    $
    4,000Minimum earnout adjustment related to the acquisition of Hawaiian Sweet and Pride
    
    $
    
    
    
    $
    902
    
    
    $
    Unrealized holding gains (losses)
    
    $
    10,786
    
    
    $
    (5,704
    )
    
    $
    (19,058
    )In February 2010, we entered into an asset purchase and contribution agreement in which we
acquired a 65 percent ownership interest in newly created Calavo Salsa Lisa, LLC which acquired
substantially all of the assets of Lisas Salsa Company. See Note 16 for further information. The
following table summarizes the estimated fair values of the non-cash assets acquired and
liabilities assumed at the date of acquisition (in thousands):(in thousands)
    
    2010Current assets, excluding cash
    
    $
    214Property, plant, and equipment
    
    
    321Goodwill
    
    
    88Intangible assets
    
    
    1,950Total assets acquired
    
    
    2,573Current liabilities
    
    
    (55
    )Noncontrolling interest
    
    
    (699
    )Contingent consideration
    
    
    (1,468
    )Net non-cash assets acquired
    
    $
    351
 34




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##### Table of Contents



CALAVO GROWERS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS-CONTINUED

(in thousands)
  (in thousands)
    
    2008Current assets
    
    $
    1,303Fixed assets
    
    
    10,947Intangible assets
    
    
    1,310Total non-cash assets acquired
    
    
    13,560Current liabilities assumed
    
    
    809Deferred and contingent consideration
    
    
    7,721Net non-cash assets acquired
    
    $
    5,030
 See accompanying notes to consolidated financial statements.
 35




---



##### 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
  Prepaid Expenses and Other Current Assets
  Inventories
  Property, Plant, and Equipment
   36




---



##### Table of Contents



Goodwill and Acquired Intangible Assets
  Long-lived Assets
  Investments
     37




---



##### Table of Contents



Marketable Securities
  Advances to Suppliers
   Infrastructure Advances
  Accrued Expenses
  Revenue Recognition
  Shipping and Handling
  38




---



##### Table of Contents



Promotional Allowances
  Allowance for Accounts Receivable
  Consignment Arrangements
  2010
    
    
    2009
    
    
    2008Sales
    
    $
    54,736
    
    
    $
    44,776
    
    
    $
    49,189Cost of Sales
    
    
    48,713
    
    
    
    41,941
    
    
    
    45,739Gross Margin
    
    $
    6,023
    
    
    $
    2,835
    
    
    $
    3,450
 Advertising Expense
  Other income, net
  Use of Estimates
  Income Taxes
   39




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##### Table of Contents



Basic and Diluted Net Income per Share
  Stock-Based Compensation
    2010
    
    
    2009
    
    
    2008Risk-free interest rate
    
    
    1.70
    %
    
    
    2.02
    %
    
    
    2.95
    %Expected volatility
    
    
    47.37
    %
    
    
    67.95
    %
    
    
    28.24
    %Dividend yield
    
    
    2.5
    %
    
    
    4.3
    %
    
    
    2.4
    %Expected life (years)
    
    
    4.0
    
    
    
    4.0
    
    
    
    4.0
    40




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##### Table of Contents



Foreign Currency Translation and Remeasurement
  Fair Value of Financial Instruments
  Derivative Financial Instruments
  Recently Adopted Accounting Pronouncements
  
    
    The period after the balance sheet date during which management of a reporting entity
should evaluate events or transactions that may occur for potential recognition or
disclosure in the financial statements.
    
    The circumstances under which an entity should recognize events or transactions
occurring after the balance sheet date in its financial statements.
    
    The disclosures that should be made about events or transactions that occurred after the
balance sheet date.
     41




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##### Table of Contents



Recently Issued Accounting Standards
   Comprehensive Income (Loss)
  Reclassifications
  42




---



##### Table of Contents



3. Inventories
  October 31,2010
    
    
    2009Fresh fruit
    
    $
    8,630
    
    
    $
    4,495Packing supplies and ingredients
    
    
    3,069
    
    
    
    2,652Finished processed foods
    
    
    3,132
    
    
    
    4,584$
    14,831
    
    
    $
    11,731
     4. Property, Plant, and Equipment
  October 31,2010
    
    
    2009Land
    
    $
    7,023
    
    
    $
    6,923Buildings and improvements
    
    
    18,039
    
    
    
    17,694Leasehold improvements
    
    
    1,104
    
    
    
    828Equipment
    
    
    48,725
    
    
    
    45,812Information systems  Hardware and software
    
    
    5,175
    
    
    
    5,209Construction in progress
    
    
    2,265
    
    
    
    64882,331
    
    
    
    77,114Less accumulated depreciation and amortization
    
    
    (41,272
    )
    
    
    (38,493
    )$
    41,059
    
    
    $
    38,621
   43




---



##### Table of Contents



5. Other Assets
  October 31,
    
    
    October 31,2010
    
    
    2009Grower advances
    
    $
    1,827
    
    
    $
    2,123Intangibles, net
    
    
    2,872
    
    
    
    1,205Loan to Agricola Belher
    
    
    1,225
    
    
    
    2,450Other
    
    
    316
    
    
    
    298$
    6,240
    
    
    $
    6,076
  6. Revolving Credit Facilities
  7. Employee Benefit Plans
    2010
    
    
    2009Change in projected benefit obligation:Projected benefit obligation at beginning of year
    
    $
    283
    
    
    $
    279Interest cost
    
    
    16
    
    
    
    18Actuarial loss
    
    
    18
    
    
    
    30Benefits paid
    
    
    (42
    )
    
    
    (44
    )Projected benefit obligation at end of year (unfunded)
    
    $
    275
    
    
    $
    283
 44




---



##### Table of Contents



2010
    
    
    2009Projected benefit obligation
    
    $
    275
    
    
    $
    283Unrecognized net (gain) loss
    
    
    
    
    
    
    Recorded pension liabilities
    
    $
    275
    
    
    $
    283
  2010
    
    
    2009Discount rate on projected benefit obligation
    
    
    5.00
    %
    
    
    5.25
    %
 8. Commitments and Contingencies
 Commitments and guarantees
  2011
    
    $
    1,4802012
    
    
    1,3782013
    
    
    1,3652014
    
    
    1,2972015
    
    
    1,216Thereafter
    
    
    4,756$
    11,492
    Litigation
 Hacienda Suits
  45




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##### Table of Contents



9. Related-Party Transactions
    10. Income Taxes
  2010
    
    
    2009
    
    
    2008Current:Federal
    
    $
    7,988
    
    
    $
    6,305
    
    
    $
    2,639State
    
    
    1,868
    
    
    
    1,522
    
    
    
    615Foreign
    
    
    153
    
    
    
    160
    
    
    
    251Total current
    
    
    10,009
    
    
    
    7,987
    
    
    
    3,505Deferred
    
    
    1,332
    
    
    
    290
    
    
    
    1,062Total income tax provision
    
    $
    11,341
    
    
    $
    8,277
    
    
    $
    4,567
   2010
    
    
    2009Allowances for accounts receivable
    
    $
    609
    
    
    $
    1,568Inventories
    
    
    662
    
    
    
    283State taxes
    
    
    470
    
    
    
    342Intangible assets
    
    
    
    
    
    
    73Accrued liabilities
    
    
    595
    
    
    
    462Current deferred income taxes
    
    $
    2,336
    
    
    $
    2,728Property, plant, and equipment
    
    
    (3,775
    )
    
    
    (2,732
    )Intangible assets
    
    
    (76
    )
    
    
    (178
    )Unrealized gain, Limoneira investment
    
    
    (4,586
    )
    
    
    (292
    )Retirement benefits
    
    
    
    
    
    
    (83
    )Stock-based compensation
    
    
    125
    
    
    
    250Other
    
    
    46
    
    
    
    3Long-term deferred income taxes
    
    $
    (8,266
    )
    
    $
    (3,032
    )
 46




---



##### Table of Contents



2010
    
    
    2009
    
    
    2008Federal statutory tax rate
    
    
    35.0
    %
    
    
    35.0
    %
    
    
    35.0
    %State taxes, net of federal effects
    
    
    4.8
    
    
    
    4.9
    
    
    
    4.3Foreign income taxes greater (less) than U.S.
    
    
    (0.9
    )
    
    
    (1.1
    )
    
    
    (1.2
    )Benefit of lower federal tax brackets
    
    
    
    
    
    
    
    
    
    
    (0.6
    )Other
    
    
    0.2
    
    
    
    (1.0
    )
    
    
    (0.3
    )39.1
    %
    
    
    37.8
    %
    
    
    37.2
    %
    Balance at November 1, 2008
    
    $
    107Additions for tax positions of prior years
    
    
    (4
    )Balance at October 31, 2009
    
    
    103Balance at October 31, 2010
    
    $
    103
   11. Segment Information
  47




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##### Table of Contents



Fresh
    
    
    Calavo-products
    
    
    Foods
    
    
    Total(All amounts are presented in thousands)Year ended October 31, 2010Net sales
    
    $
    348,052
    
    
    $
    50,299
    
    
    $
    398,351Cost of sales
    
    
    309,609
    
    
    
    37,212
    
    
    
    346,821Gross margin
    
    $
    38,443
    
    
    $
    13,087
    
    
    $
    51,530Year ended October 31, 2009Net sales
    
    $
    300,235
    
    
    $
    44,530
    
    
    $
    344,765Cost of sales
    
    
    271,159
    
    
    
    29,073
    
    
    
    300,232Gross margin
    
    $
    29,076
    
    
    $
    15,457
    
    
    $
    44,533Year ended October 31, 2008Net sales
    
    $
    315,667
    
    
    $
    45,807
    
    
    $
    361,474Cost of sales
    
    
    293,444
    
    
    
    34,849
    
    
    
    328,293Gross margin
    
    $
    22,223
    
    
    $
    10,958
    
    
    $
    33,181
   Year ended October 31, 2010
    
    
    Year ended October 31, 2009Fresh
    
    
    Calavo-

    
    
    
    
    
    
    Fresh
    
    

    Calavo-products
    
    
    Foods
    
    
        Total
    
    

    products
    
    

    Foods
    

    
    TotalThird-party sales:Avocados
    
    $
    287,808
    
    
    $
    
    
    
    $
    287,808
    
    
    $
    259,558
    
    
    $
    
    
    
    $
    259,558Tomatoes
    
    
    41,595
    
    
    
    
    
    
    
    41,595
    
    
    
    14,067
    
    
    
    
    
    
    
    14,067Papayas
    
    
    11,278
    
    
    
    
    
    
    
    11,278
    
    
    
    9,118
    
    
    
    
    
    
    
    9,118Pineapples
    
    
    3,838
    
    
    
    
    
    
    
    3,838
    
    
    
    13,341
    
    
    
    
    
    
    
    13,341Other Fresh products
    
    
    3,617
    
    
    
    
    
    
    
    3,617
    
    
    
    4,219
    
    
    
    
    
    
    
    4,219CalavoFoods  food service
    
    
    
    
    
    
    40,654
    
    
    
    40,654
    
    
    
    
    
    
    
    36,493
    
    
    
    36,493CalavoFoods  retail and club
    
    
    
    
    
    
    17,473
    
    
    
    17,473
    
    
    
    
    
    
    
    15,554
    
    
    
    15,554Total gross sales
    
    
    348,136
    
    
    
    58,127
    
    
    
    406,263
    
    
    
    300,303
    
    
    
    52,047
    
    
    
    352,350Less sales incentives
    
    
    (84
    )
    
    
    (7,828
    )
    
    
    (7,912
    )
    
    
    (68
    )
    
    
    (7,517
    )
    
    
    (7,585
    )Net sales
    
    $
    348,052
    
    
    $
    50,299
    
    
    $
    398,351
    
    
    $
    300,235
    
    
    $
    44,530
    
    
    $
    344,765
 Year ended October 31, 2009
    
    
    Year ended October 31, 2008Fresh
    
    
    Calavo-
    
    
    
    
    
    
    Fresh
    
    
    Calavo-products
    
    
    Foods
    
    
    Total
    
    
    products
    
    
    Foods
    
    
    TotalThird-party sales:Avocados
    
    $
    259,558
    
    
    $
    
    
    
    $
    259,558
    
    
    $
    268,674
    
    
    $
    
    
    
    $
    268,674Tomatoes
    
    
    14,067
    
    
    
    
    
    
    
    14,067
    
    
    
    19,666
    
    
    
    
    
    
    
    19,666Papayas
    
    
    9,118
    
    
    
    
    
    
    
    9,118
    
    
    
    8,392
    
    
    
    
    
    
    
    8,392Pineapples
    
    
    13,341
    
    
    
    
    
    
    
    13,341
    
    
    
    16,442
    
    
    
    
    
    
    
    16,442Other Fresh products
    
    
    4,219
    
    
    
    
    
    
    
    4,219
    
    
    
    2,564
    
    
    
    
    
    
    
    2,564CalavoFoods  food service
    
    
    
    
    
    
    36,493
    
    
    
    36,493
    
    
    
    
    
    
    
    38,919
    
    
    
    38,919CalavoFoods  retail and club
    
    
    
    
    
    
    15,554
    
    
    
    15,554
    
    
    
    
    
    
    
    14,634
    
    
    
    14,634Total gross sales
    
    
    300,303
    
    
    
    52,047
    
    
    
    352,350
    
    
    
    315,738
    
    
    
    53,553
    
    
    
    369,291Less sales incentives
    
    
    (68
    )
    
    
    (7,517
    )
    
    
    (7,585
    )
    
    
    (71
    )
    
    
    (7,746
    )
    
    
    (7,817
    )Net sales
    
    $
    300,235
    
    
    $
    44,530
    
    
    $
    344,765
    
    
    $
    315,667
    
    
    $
    45,807
    
    
    $
    361,474
    United States
    
    Mexico
    
    Consolidated2010
    
    $
    24,816
    
    
    $
    16,243
    
    
    $
    41,0592009
    
    $
    22,748
    
    
    $
    15,873
    
    
    $
    38,621
 48




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##### Table of Contents



12. Long-Term Obligations
  2010
    
    
    2009Farm Credit West, PCA, term loan, bearing interest at 5.7%
    
    $
    6,500
    
    
    $
    7,800Farm Credit West, PCA, long-term portion of revolving credit facility (Note 6)
    
    
    
    
    
    
    6,450Capital Lease, bearing interest at 4.3% at October 31, 2010 and 2009
    
    
    958
    
    
    
    1,0247,458
    
    
    
    15,274Less current portion
    
    
    (1,369
    )
    
    
    (1,366
    )$
    6,089
    
    
    $
    13,908
    TotalYear ending October 31:2011
    
    $
    1,3692012
    
    
    1,3732013
    
    
    1,3762014
    
    
    1,3802015
    
    
    1,383Thereafter
    
    
    577$
    7,458
 13. Stock-Based Compensation
 The Directors Stock Option Plan
   Weighted-AverageNumber of Shares
    
    
    Exercise PriceOutstanding at October 31, 2007
    
    
    49
    
    
    $
    7.00Exercised
    
    
    (25
    )
    
    $
    7.00Forfeited
    
    
    (24
    )
    
    $
    7.00Outstanding at October 31, 2008
    
    
    
  The Employee Stock Purchase Plan
  49




---



##### Table of Contents



84
    
    participating employees electing to purchase approximately 279,000 shares. There was
no activity related to such plan since this award.
 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, 2007
    
    
    333
    
    
    $
    9.18Granted
    
    
    58
    
    
    $
    14.58
    
    
    $3.18/shareForfeited
    
    
    (8
    )
    
    $
    10.46Exercised
    
    
    (23
    )
    
    $
    9.22Outstanding at October 31, 2008
    
    
    360
    
    
    $
    10.02Granted
    
    
    10
    
    
    $
    8.05
    
    
    $3.67/shareExercised
    
    
    (86
    )
    
    $
    9.10Outstanding at October 31, 2009
    
    
    284
    
    
    $
    10.23Granted
    
    
    10
    
    
    $
    19.20
    
    
    $6.36/shareExercised
    
    
    (207
    )
    
    $
    9.13Outstanding at October 31, 2010
    
    
    87
    
    
    $
    13.89
    
    
    
    
    
    
    $
    696Exercisable at October 31, 2010
    
    
    28
    
    
    $
    13.53
    
    
    
    
    
    
    $
    236
 50




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##### Table of Contents



14. Dividends
  15. Fair value measurements
 
  Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    Total(All amounts are presented in thousands)Assets at Fair Value:Investment in Limoneira Company(1)
    
    $
    34,986
    
    
    
    
    
    
    
    
    
    
    $
    34,986Total assets at fair value
    
    $
    34,986
    
    
    $
    
    
    
    $
    
    
    
    $
    34,986
 
 (1)
    
    The investment in Limoneira Company consists of marketable securities in the
Limoneira Company stock. We currently own approximately 15% of Limoneiras outstanding
common stock. These securities are measured at fair value by quoted market prices.
Limoneiras stock price at October 31, 2010 and October 31, 2009 equaled $20.24 per share
and $14.00 per share (adjusted for a 10 to 1 stock split). Unrealized gain and losses
are recognized through other comprehensive income. Unrealized investment holding gains
arising during the year ended October 31, 2010 was $10.8 million. Unrealized investment
holding losses arising during the year ended October 31, 2009 was $5.7 million. Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    Total(All amounts are presented in thousands)Liabilities at Fair Value:Salsa Lisa contingent consideration(2)
    
    
    
    
    
    
    
    
    
    $
    1,521
    
    
    $
    1,521Total assets at fair value
    
    $
    
    
    
    $
    
    
    
    $
    1,521
    
    
    $
    1,521
 
 (2)
    
    See Note 16 for further discussion. 16. Business Acquisition
   51




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Then Earn-outNet Sales of:
    
    Payment shall be:$30,000,000
    
    $
    1,000,000$40,000,000
    
    $
    1,000,000$50,000,000
    
    $
    1,000,000Maximum earn-out payment possible
    
    $
    3,000,000
       At February 8, 2010
 Current assets
    
    $
    263Property, plant, and equipment
    
    
    321Goodwill
    
    
    88Intangible assets
    
    
    1,950Total assets acquired
    
    
    2,622Current liabilities
    
    
    (55
    )Noncontrolling interest
    
    
    (699
    )Contingent consideration
    
    
    (1,468
    )Net cash paid as of February 8, 2010
    
    $
    400
  52




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##### Table of Contents



Year endedOctober 31, 2010Noncontrolling interest, beginning
    
    $
    Net loss attributable to noncontrolling
interest
    
    
    (124
    )Capital contributions
    
    
    699Noncontrolling interest, ending
    
    $
    575
 17. Subsequent Events
    53




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
      /s/ Ernst & Young LLP 
 54




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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
  Changes in Internal Control Over Financial Reporting
  Managements Report on Internal Control Over Financial Reporting
 Internal Control  Integrated Framework Internal Control  Integrated Framework
 55




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
      .
  /s/ Ernst & Young LLP 
 56




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##### Table of Contents



Item 9B. Other Information
  
 PART III
  
 Item 10. Directors, Executive Officers, 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
  57




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##### Table of Contents



Part IV
 
 Item 15. Exhibits and Financial Statement Schedules
 (a)
    (1)
    Financial StatementsThe following consolidated financial statements as of October 31, 2010 and 2009 and for each
of the three years in the period ended October 31, 2010 are included herewith:Consolidated Balance Sheets, Consolidated Statements of Income, Consolidated Statements of
Comprehensive Income (Loss), Consolidated Statements of Cash Flows, Consolidated Statements of
Shareholders Equity, Notes to Consolidated Financial Statements, and Report of Ernst & Young
LLP, Independent Registered Public Accounting Firm.
 (2)
    Supplemental SchedulesSchedule II  Valuation and Qualifying AccountsAll other schedules have been omitted since the required information is not present in
amounts sufficient to require submission of the schedule, or because the required information
is included in the consolidated financial statements or notes thereto.(3)
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. Badillo22.3
    
    Stock Purchase Agreement dated as of June 1, 2005, between
Limoneira Company and Calavo Growers, Inc.32.4
    
    Acquisition Agreement between Calavo Growers, Inc., a California corporation and Lecil E.
Cole, Eric Weinert, Suzanne Cole-Savard, Guy Cole, and Lecil E. Cole and Mary Jeanette
Cole, acting jointly and severally as trustees of the Lecil E. and Mary Jeanette Cole
Revocable Trust dated October 19, 1993, also known as the Lecil E. and Mary Jeanette Cole
Revocable 1993 Trust dated May 19, 2008 42.5
    
    Acquisition Agreement between Calavo Growers, Inc., Calavo Salsa Lisa, LLC, Lisas Salsa
Company and Elizabeth Nicholson and Eric Nicholson dated February 8, 2010 53.1
    
    Articles of Incorporation of Calavo Growers, Inc.13.2
    
    Amended and Restated Bylaws of Calavo Growers, Inc.610.1
    
    Form of Marketing Agreement for Calavo Growers, Inc.710.2
    
    Marketing Agreement dated as of April 1, 1996 between
Tropical Hawaiian Products, Inc., a Hawaiian corporation,
and Calavo Growers of California.110.3
    
    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, 1996.110.4
    
    Lease agreement dated as of February 15, 2005, between Limoneira
Company and Calavo Growers, Inc.310.5
    
    Standstill agreement dated June 1, 2005, between Limoneira
Company and Calavo Growers, Inc.310.6
    
    Standstill agreement dated June 1, 2005 between Calavo Growers, Inc.
And Limoneira Company310.7
    
    Term Loan Agreement dated April 9, 2008 (effective date May 1, 2008)
between Farm Credit West, PCA, and Calavo Growers, Inc.810.8
    
    2005 Stock Incentive Plan Of Calavo Growers, Inc.9
 58




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##### Table of Contents



ExhibitNumber
    
    Description10.9
    
    Calavo Supplemental Executive Retirement Agreement dated
March 11, 1989 between Egidio Carbone, Jr. and Calavo
Growers of California.110.10
    
    Amendment to the Calavo Growers of California Supplemental
Executive Retirement Agreement dated November 9, 1993
Between Egidio Carbone, Jr. and Calavo Growers of California.110.11
    
    2001 Stock Option Plan for Directors.1010.12
    
    2001 Stock Purchase Plan for Officers and Employees.1010.13
    
    Business Loan Agreement between Bank of America, N.A. and Calavo
Growers, Inc., dated October 15, 20071110.14
    
    First Amendment Agreement between Bank of America, N.A. and Calavo
Growers, Inc., dated August 28, 20081210.15
    
    Form of Stock Option Agreement1310.16
    
    Amendment No. 2 to Loan Agreement dated as of July 31, 2009 between Calavo Growers, Inc.
and Bank of America, N.A. 1410.17
    
    Amendment to Term Loan Agreement between Farm Credit West, PCA, and Calavo Growers, Inc
1510.18
    
    2011 Management Incentive Plan of Calavo Growers, Inc.*21.1
    
    Subsidiaries of Calavo Growers, Inc.123.1
    
    Consent of Ernst & Young 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 *
 
 *
    
    Filed with this Annual Report on Form 10-K.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 January 23, 2004 as an exhibit to the Registrants Report on Form 10-K and incorporated herein by reference.3
    
    Previously filed on June 9, 2005 as an exhibit to the Registrants Report on Form 10-Q and incorporated herein by reference.4
    
    Previously filed on May 29, 2008 as an exhibit to the Registrants Report on Form 8-K and incorporated herein by reference.5
    
    Previously filed on February 8, 2010 as an exhibit to the Registrants Report on Form 8-K and incorporated herein by reference.6
    
    Previously filed on December 19, 2002 as an exhibit to the Registrants Report on Form 8-K, and incorporated herein by reference.7
    
    Previously filed on January 28, 2003 as an exhibit to the Registrants Report on Form 10-K and incorporated herein by reference.8
    
    Previously filed on May 8, 2008 as an exhibit to the Registrants Report on Form 8-K and incorporated herein by reference.9
    
    Previously filed on March 21, 2005 as an exhibit to the Registrants Definitive Proxy
Statement on Form DEF14A and incorporated herein by reference.10
    
    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.11
    
    Previously filed on October 19, 2007 as an exhibit to the Registrants Report on Form 8-K and incorporated herein by reference.12
    
    Previously filed on January 27, 2009 as an exhibit to the Registrants Report on Form 10-K/A and incorporated herein by reference.13
    
    Previously filed on September 11, 2006 as an exhibit to the Registrants Report on Form 10-Q and incorporated herein by reference.14
    
    Previously filed on August 6, 2009 as an exhibit to the Registrants Report on Form 8-K and incorporated herein by reference.15
    
    Previously filed on January 11, 2010 as an exhibit to the Registrants Report on Form 10-K and incorporated herein by reference.   59




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##### Table of Contents



Financial Statement Schedules
  60




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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/ Marc L. Brown

Marc L. Brown
    
    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/ Steven W. Hollister

Steven W. Hollister
    
    Director/s/ Harold Edwards

Harold Edwards
    
    Director/s/ Scott Van Der Kar

Scott Van Der Kar
    
    Director
 61




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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
    
    
    2008
    
    
    
    1,329
    
    
    
    7,065
    
    
    
    7,163
    
    
    
    1,2312009
    
    
    
    1,231
    
    
    
    6,080
    
    
    
    6,058
    
    
    
    1,2532010
    
    
    
    1,253
    
    
    
    6,474
    
    
    
    6,912
    
    
    
    815Allowance for doubtful accounts
    
    
    2008
    
    
    
    942
    
    
    
    93
    
    
    
    53
    
    
    
    9822009
    
    
    
    982
    
    
    
    122
    
    
    
    4
    
    
    
    1,1002010
    
    
    
    1,100
    
    
    
    127
    
    
    
    670
    
    
    
    557
 
 (1)
    
    Charged to net sales (customer deductions) or costs and expenses (doubtful accounts).(2)
    
    Customer deductions taken or write off of accounts receivables. 62




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##### Table of Contents



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. Badillo22.3
    
    Stock Purchase Agreement dated as of June 1, 2005, between
Limoneira Company and Calavo Growers, Inc.32.4
    
    Acquisition Agreement between Calavo Growers, Inc., a California corporation and Lecil E.
Cole, Eric Weinert, Suzanne Cole-Savard, Guy Cole, and Lecil E. Cole and Mary Jeanette
Cole, acting jointly and severally as trustees of the Lecil E. and Mary Jeanette Cole
Revocable Trust dated October 19, 1993, also known as the Lecil E. and Mary Jeanette Cole
Revocable 1993 Trust dated May 19, 2008 42.5
    
    Acquisition Agreement between Calavo Growers, Inc., Calavo Salsa Lisa, LLC, Lisas Salsa
Company and Elizabeth Nicholson and Eric Nicholson dated February 8, 2010 53.1
    
    Articles of Incorporation of Calavo Growers, Inc.13.2
    
    Amended and Restated Bylaws of Calavo Growers, Inc.610.1
    
    Form of Marketing Agreement for Calavo Growers, Inc.710.2
    
    Marketing Agreement dated as of April 1, 1996 between
Tropical Hawaiian Products, Inc., a Hawaiian corporation,
and Calavo Growers of California.110.3
    
    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, 1996.110.4
    
    Lease agreement dated as of February 15, 2005, between Limoneira
Company and Calavo Growers, Inc.310.5
    
    Standstill agreement dated June 1, 2005, between Limoneira
Company and Calavo Growers, Inc.310.6
    
    Standstill agreement dated June 1, 2005 between Calavo Growers, Inc.
And Limoneira Company310.7
    
    Term Loan Agreement dated April 9, 2008 (effective date May 1, 2008)
between Farm Credit West, PCA, and Calavo Growers, Inc.810.8
    
    2005 Stock Incentive Plan Of Calavo Growers, Inc.910.9
    
    Calavo Supplemental Executive Retirement Agreement dated
March 11, 1989 between Egidio Carbone, Jr. and Calavo
Growers of California.110.10
    
    Amendment to the Calavo Growers of California Supplemental
Executive Retirement Agreement dated November 9, 1993
Between Egidio Carbone, Jr. and Calavo Growers of California.110.11
    
    2001 Stock Option Plan for Directors.1010.12
    
    2001 Stock Purchase Plan for Officers and Employees.1010.13
    
    Business Loan Agreement between Bank of America, N.A. and Calavo
Growers, Inc., dated October 15, 20071110.14
    
    First Amendment Agreement between Bank of America, N.A. and Calavo
Growers, Inc., dated August 28, 20081210.15
    
    Form of Stock Option Agreement1310.16
    
    Amendment No. 2 to Loan Agreement dated as of July 31, 2009 between Calavo Growers, Inc.
and Bank of America, N.A. 1410.17
    
    Amendment to Term Loan Agreement between Farm Credit West, PCA, and Calavo Growers, Inc
1510.18
    
    2011 Management Incentive Plan of Calavo Growers, Inc.*21.1
    
    Subsidiaries of Calavo Growers, Inc.123.1
    
    Consent of Ernst & Young 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)*
 63




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##### Table of Contents



ExhibitNumber
    
    Description32
    
    Certification of Chief Executive Officer and Chief Financial Officer of
Periodic Report Pursuant to 18 U.S.C. Section 1350 *
 
 *
    
    Filed with this Annual Report on Form 10-K.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 January 23, 2004 as an exhibit to the Registrants Report on Form 10-K and incorporated herein by reference.3
    
    Previously filed on June 9, 2005 as an exhibit to the Registrants Report on Form 10-Q and incorporated herein by reference.4
    
    Previously filed on May 29, 2008 as an exhibit to the Registrants Report on Form 8-K and incorporated herein by reference.5
    
    Previously filed on February 8, 2010 as an exhibit to the Registrants Report on Form 8-K and incorporated herein by reference.6
    
    Previously filed on December 19, 2002 as an exhibit to the Registrants Report on Form 8-K, and incorporated herein by reference.7
    
    Previously filed on January 28, 2003 as an exhibit to the Registrants Report on Form 10-K and incorporated herein by reference.8
    
    Previously filed on May 8, 2008 as an exhibit to the Registrants Report on Form 8-K and incorporated herein by reference.9
    
    Previously filed on March 21, 2005 as an exhibit to the Registrants Definitive Proxy
Statement on Form DEF14A and incorporated herein by reference.10
    
    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.11
    
    Previously filed on October 19, 2007 as an exhibit to the Registrants Report on Form 8-K and incorporated herein by reference.12
    
    Previously filed on January 27, 2009 as an exhibit to the Registrants Report on Form 10-K/A and incorporated herein by reference.13
    
    Previously filed on September 11, 2006 as an exhibit to the Registrants Report on Form 10-Q and incorporated herein by reference.14
    
    Previously filed on August 6, 2009 as an exhibit to the Registrants Report on Form 8-K and incorporated herein by reference.15
    
    Previously filed on January 11, 2010 as an exhibit to the Registrants Report on Form 10-K and incorporated herein by reference. 64