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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, 2009
 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
    
    93060(Address of principal executive offices)
    
    (Zip code)
 Registrants telephone number, including area code: (805) 525-1245
 Securities registered pursuant to Section 12(b) of the Act:
 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(Do not check if a smaller reporting company)
Smaller reporting company o o þ
  Documents Incorporated by Reference




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TABLE OF CONTENTS  PART IItem 1A. Risk FactorsItem 1B. Unresolved Staff CommentsItem 2. PropertiesItem 3. Legal ProceedingsItem 4. Submission of Matters to a Vote of Security HoldersExecutive Officers of the RegistrantPART 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-10.19EX-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
        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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Sales and Other Financial Information by Business Segment and Product Category
  Patents and Trademarks
  Working Capital Requirements
    Backlog
  7




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Research and Development
  Compliance with Government Regulations
     Employees
   Location
    
    Salaried
    
    Hourly
    
    TotalUnited States
    
    
    121
    
    
    
    257
    
    
    
    378Mexico
    
    
    118
    
    
    
    553
    
    
    
    671TOTAL
    
    
    239
    
    
    
    810
    
    
    
    1,049
 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;
 
    
    Changes in legal or regulatory requirements affecting foreign investment, loans, taxes,
imports, and exports; and
 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.
   The acquisition of other businesses could pose risks to our operating income.
  10




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Our ability to competitively serve our customers is a function of reliable and low cost
transportation. Disruption of the supply of these services and/or significant increases in the cost
of these services could impact our operating income.
  A portion of our workforce is unionized and labor disruptions could decrease our profitability.
  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
  United States Locations
     11




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Mexico Locations
   
 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
    
    
    70
    
    
    Chairman of the Board, Chief Executive Officer and PresidentArthur J. Bruno
    
    
    59
    
    
    Chief Operating Officer, Chief Financial Officer and Corporate SecretaryRobert J. Wedin
    
    
    60
    
    
    Vice President, Sales and Fresh MarketingAlan C. Ahmer
    
    
    61
    
    
    Vice President, Processed Product Sales and ProductionMichael A. Browne
    
    
    51
    
    
    Vice President, Fresh Operations
 Lecil E. Cole
 Arthur J. Bruno
 Robert J. Wedin
 Alan C. Ahmer
 12




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Michael A. Browne
 
 PART II
 
 Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
   Fiscal 2009
    
    High
    
    LowFirst Quarter
    
    $
    13.34
    
    
    $
    5.93Second Quarter
    
    $
    14.49
    
    
    $
    10.22Third Quarter
    
    $
    20.01
    
    
    $
    11.82Fourth Quarter
    
    $
    20.30
    
    
    $
    16.29
 Fiscal 2008
    
    High
    
    LowFirst Quarter
    
    $
    22.71
    
    
    $
    14.75Second Quarter
    
    $
    20.09
    
    
    $
    13.53Third Quarter
    
    $
    15.65
    
    
    $
    10.46Fourth Quarter
    
    $
    13.87
    
    
    $
    8.42
   Dividend Policy
    13




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Item 6. Selected Financial Data
 SELECTED CONSOLIDATED FINANCIAL DATA
   Fiscal Year Ended October 31,2009
    
    2008
    
    2007
    
    2006
    
    2005(In thousands, except per share data)Income Statement Data:(1)Net sales
    
    $
    344,765
    
    
    $
    361,474
    
    
    $
    302,984
    
    
    $
    273,723
    
    
    $
    258,822Gross margin
    
    
    44,533
    
    
    
    33,181
    
    
    
    31,772
    
    
    
    29,084
    
    
    
    21,734Net income
    
    
    13,611
    
    
    
    7,725
    
    
    
    7,330
    
    
    
    5,788
    
    
    
    3,322Basic net income per share
    
    $
    0.94
    
    
    $
    0.54
    
    
    $
    0.51
    
    
    $
    0.40
    
    
    $
    0.24Diluted net income per share
    
    $
    0.94
    
    
    $
    0.53
    
    
    $
    0.51
    
    
    $
    0.40
    
    
    $
    0.24Balance Sheet Data as of End of Period:Working capital
    
    $
    12,557
    
    
    $
    15,413
    
    
    $
    16,334
    
    
    $
    12,023
    
    
    $
    17,618Total assets
    
    
    123,216
    
    
    
    134,686
    
    
    
    128,018
    
    
    
    107,563
    
    
    
    108,482Current portion of long-term obligations
    
    
    1,366
    
    
    
    1,362
    
    
    
    1,307
    
    
    
    1,308
    
    
    
    1,313Long-term debt, less current portion
    
    
    13,908
    
    
    
    25,351
    
    
    
    13,106
    
    
    
    10,406
    
    
    
    11,719Shareholders equity
    
    
    69,487
    
    
    
    65,517
    
    
    
    74,003
    
    
    
    58,943
    
    
    
    64,746Cash Flows Provided by (Used in):Operations
    
    $
    21,997
    
    
    $
    5,296
    
    
    $
    4,629
    
    
    $
    7,819
    
    
    $
    5,568Investing(2)(3)
    
    
    (5,990
    )
    
    
    (7,454
    )
    
    
    (7,950
    )
    
    
    (4,663
    )
    
    
    (11,941
    )Financing
    
    
    (16,641
    )
    
    
    2,700
    
    
    
    4,238
    
    
    
    (4,239
    )
    
    
    6,870Other Data:Dividends declared per share
    
    $
    0.50
    
    
    $
    0.35
    
    
    $
    0.35
    
    
    $
    0.32
    
    
    $
    0.32Net book value per share
    
    $
    4.79
    
    
    $
    4.52
    
    
    $
    5.15
    
    
    $
    4.12
    
    
    $
    4.51Pounds of California avocados sold
    
    
    53,000
    
    
    
    92,165
    
    
    
    91,038
    
    
    
    218,460
    
    
    
    104,950Pounds of non-California avocados sold
    
    
    162,950
    
    
    
    123,740
    
    
    
    135,723
    
    
    
    70,063
    
    
    
    103,830Pounds of processed avocados products sold
    
    
    21,259
    
    
    
    22,274
    
    
    
    22,556
    
    
    
    20,489
    
    
    
    15,628
 
 (1)
    
    Operating results for fiscal 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, as discussed in Note 9
to our consolidated financial statements. See Note 17 to our consolidated financial
statements for further discussion of these acquisitions.(2)
    
    For fiscal year 2008, we advanced $0.8 million to Agricola Belher pursuant to our
infrastructure agreement. Agricola Belher paid $1.0 million in 2008 for net cash provided of
$0.2 million. For fiscal year 2009, we have not made any infrastructure advances to Agricola
Belher. Agricola Belher paid $0.5 million in fiscal year 2009 related to infrastructure
advances. See Note 15 to our consolidated financial statements for further discussion of the
infrastructure advances to Agricola Belher.(3)
    
    In fiscal 2008, we purchased HS and HP for $5.2 million. See Note 17 to our consolidated
financial statements for further discussion of these acquisitions. 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
       15




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Recent Developments
 Dividend Payment
  Contingencies
 Hacienda Suit
 IRS examination
  Term Revolving Credit Agreement
  First Earn-Out Payment
  Critical Accounting Estimates
  16




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Promotional allowances .
 Income Taxes .
   Goodwill and acquired intangible assets
 Allowance for accounts receivable
 17




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Results of Operations
  Year ended October 31,2009
    
    2008
    
    2007Net sales
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Gross margins
    
    
    12.9
    %
    
    
    9.2
    %
    
    
    10.5
    %Selling, general and administrative
    
    
    6.6
    %
    
    
    5.8
    %
    
    
    6.5
    %Operating income
    
    
    6.3
    %
    
    
    3.4
    %
    
    
    4.0
    %Interest income
    
    
    0.1
    %
    
    
    0.1
    %
    
    
    0.1
    %Interest expense
    
    
    (0.3
    )%
    
    
    (0.4
    )%
    
    
    (0.4
    )%Other income, net
    
    
    0.1
    %
    
    
    0.2
    %
    
    
    0.2
    %Net income
    
    
    3.9
    %
    
    
    2.1
    %
    
    
    2.4
    %
 Net Sales
      2009
    
    
    Change
    
    
    2008
    
    
    Change
    
    
    2007(Dollars in thousands)Net sales:Fresh products
    
    $
    300,235
    
    
    
    (4.9
    %)
    
    $
    315,667
    
    
    
    20.8
    %
    
    $
    261,325Processed products
    
    
    44,530
    
    
    
    (2.8
    %)
    
    
    45,807
    
    
    
    10.0
    %
    
    
    41,659Total net sales
    
    $
    344,765
    
    
    
    (4.6
    %)
    
    $
    361,474
    
    
    
    19.3
    %
    
    $
    302,984As a percentage of net sales:Fresh products
    
    
    87.1
    %
    
    
    
    
    
    
    87.3
    %
    
    
    
    
    
    
    86.3
    %Processed products
    
    
    12.9
    %
    
    
    
    
    
    
    12.7
    %
    
    
    
    
    
    
    13.7
    %100.0
    %
    
    
    
    
    
    
    100.0
    %
    
    
    
    
    
    
    100.0
    %
 18




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Year ended October 31, 2009
    
    
    Year ended October 31, 2008Fresh
    
    
    Processed
    
    
    
    
    
    
    Fresh
    
    
    Processedproducts
    
    
    products
    
    
    Total
    
    
    products
    
    
    products
    
    
    TotalThird-party sales:Avocados
    
    $
    259,558
    
    
    $
    
    
    
    $
    259,558
    
    
    $
    268,674
    
    
    $
    
    
    
    $
    268,674Tomatoes
    
    
    14,067
    
    
    
    
    
    
    
    14,067
    
    
    
    19,666
    
    
    
    
    
    
    
    19,666Pineapples
    
    
    13,341
    
    
    
    
    
    
    
    13,341
    
    
    
    16,442
    
    
    
    
    
    
    
    16,442Papayas
    
    
    9,118
    
    
    
    
    
    
    
    9,118
    
    
    
    8,392
    
    
    
    
    
    
    
    8,392Other Fresh products
    
    
    4,219
    
    
    
    
    
    
    
    4,219
    
    
    
    2,564
    
    
    
    
    
    
    
    2,564Processed  food service
    
    
    
    
    
    
    36,493
    
    
    
    36,493
    
    
    
    
    
    
    
    38,919
    
    
    
    38,919Processed  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
 Year ended October 31, 2008
    
    
    Year ended October 31, 2007Fresh
    
    
    Processed
    
    
    
    
    
    
    Fresh
    
    
    Processedproducts
    
    
    products
    
    
    Total
    
    
    products
    
    
    products
    
    
    TotalThird-party sales:Avocados
    
    $
    268,674
    
    
    $
    
    
    
    $
    268,674
    
    
    $
    242,197
    
    
    $
    
    
    
    $
    242,197Tomatoes
    
    
    19,666
    
    
    
    
    
    
    
    19,666
    
    
    
    8,837
    
    
    
    
    
    
    
    8,837Pineapples
    
    
    16,442
    
    
    
    
    
    
    
    16,442
    
    
    
    24
    
    
    
    
    
    
    
    24Papayas
    
    
    8,392
    
    
    
    
    
    
    
    8,392
    
    
    
    6,044
    
    
    
    
    
    
    
    6,044Other Fresh products
    
    
    2,564
    
    
    
    
    
    
    
    2,564
    
    
    
    4,242
    
    
    
    
    
    
    
    4,242Processed  food service
    
    
    
    
    
    
    38,919
    
    
    
    38,919
    
    
    
    
    
    
    
    39,006
    
    
    
    39,006Processed  retail and club
    
    
    
    
    
    
    14,634
    
    
    
    14,634
    
    
    
    
    
    
    
    10,777
    
    
    
    10,777Total gross sales
    
    
    315,738
    
    
    
    53,553
    
    
    
    369,291
    
    
    
    261,344
    
    
    
    49,783
    
    
    
    311,127Less sales incentives
    
    
    (71
    )
    
    
    (7,746
    )
    
    
    (7,817
    )
    
    
    (19
    )
    
    
    (8,124
    )
    
    
    (8,143
    )Net sales
    
    $
    315,667
    
    
    $
    45,807
    
    
    $
    361,474
    
    
    $
    261,325
    
    
    $
    41,659
    
    
    $
    302,984
  Fresh Products
      19




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TM
   20




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Processed Products
       Gross Margins
  2009
    
    
    Change
    
    
    2008
    
    
    Change
    
    
    2007(Dollars in thousands)Gross Margins:Fresh products
    
    $
    29,076
    
    
    
    30.8
    %
    
    $
    22,223
    
    
    
    3.6
    %
    
    $
    21,461Processed products
    
    
    15,457
    
    
    
    41.1
    %
    
    
    10,958
    
    
    
    6.3
    %
    
    
    10,311Total gross margins
    
    $
    44,533
    
    
    
    34.2
    %
    
    $
    33,181
    
    
    
    4.4
    %
    
    $
    31,772Gross profit percentages:Fresh products
    
    
    9.7
    %
    
    
    
    
    
    
    7.0
    %
    
    
    
    
    
    
    8.2
    %Processed products
    
    
    34.7
    %
    
    
    
    
    
    
    23.9
    %
    
    
    
    
    
    
    24.8
    %Consolidated
    
    
    12.9
    %
    
    
    
    
    
    
    9.2
    %
    
    
    
    
    
    
    10.5
    %
  21




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Fresh Products
          Processed Products
   22




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##### Table of Contents



Selling, General and Administrative
 2009
    
    Change
    
    2008
    
    Change
    
    2007(Dollars in thousands)Selling, general and administrative
    
    $
    22,791
    
    
    
    9.0
    %
    
    $
    20,914
    
    
    
    5.8
    %
    
    $
    19,759Percentage of net sales
    
    
    6.6
    %
    
    
    
    
    
    
    5.8
    %
    
    
    
    
    
    
    6.5
    %
   Interest income
 2009
    
    Change
    
    2008
    
    Change
    
    2007(Dollars in thousands)Interest income
    
    $
    381
    
    
    
    (26.2
    %)
    
    $
    516
    
    
    
    108.1
    %
    
    $
    248Percentage of net sales
    
    
    0.1
    %
    
    
    
    
    
    
    0.1
    %
    
    
    
    
    
    
    0.1
    %
  Interest expense
 2009
    
    Change
    
    2008
    
    Change
    
    2007(Dollars in thousands)Interest expense
    
    $
    (1,108
    )
    
    
    (25.4
    %)
    
    $
    (1,485
    )
    
    
    10.3
    %
    
    $
    (1,346
    )Percentage of net sales
    
    
    (0.3
    )%
    
    
    
    
    
    
    (0.4
    )%
    
    
    
    
    
    
    (0.4
    )%
  23




---



##### Table of Contents



Other Income, Net
 2009
    
    Change
    
    2008
    
    Change
    
    2007(Dollars in thousands)Other income, net
    
    $
    263
    
    
    
    (63.2
    %)
    
    $
    715
    
    
    
    39.6
    %
    
    $
    512Percentage of net sales
    
    
    0.1
    %
    
    
    
    
    
    
    0.2
    %
    
    
    
    
    
    
    0.2
    %
  Provision for Income Taxes
 2009
    
    Change
    
    2008
    
    Change
    
    2007(Dollars in thousands)Provision for income taxes
    
    $
    8,277
    
    
    
    81.2
    %
    
    $
    4,567
    
    
    
    6.9
    %
    
    $
    4,271Percentage of income before
provision for income taxes
    
    
    37.8
    %
    
    
    
    
    
    
    37.2
    %
    
    
    
    
    
    
    36.8
    %
  Quarterly Results of Operations
  Three months endedOct. 31,
    
    
    July 31,
    
    
    Apr. 30,
    
    
    Jan. 31,
    
    
    Oct. 31,
    
    
    July 31,
    
    
    Apr. 30,
    
    
    Jan. 31,2009
    
    
    2009
    
    
    2009
    
    
    2009
    
    
    2008
    
    
    2008
    
    
    2008
    
    
    2008(in thousands, except per share amounts)Statement of Operations DataNet sales
    
    $
    80,942
    
    
    $
    106,347
    
    
    $
    86,829
    
    
    $
    70,647
    
    
    $
    93,553
    
    
    $
    96,903
    
    
    $
    98,777
    
    
    $
    72,241Cost of sales
    
    
    71,713
    
    
    
    96,441
    
    
    
    73,890
    
    
    
    58,188
    
    
    
    81,387
    
    
    
    89,211
    
    
    
    91,483
    
    
    
    66,212Gross margin
    
    
    9,229
    
    
    
    9,906
    
    
    
    12,939
    
    
    
    12,459
    
    
    
    12,166
    
    
    
    7,692
    
    
    
    7,294
    
    
    
    6,029Selling, general and administrative
    
    
    6,134
    
    
    
    5,822
    
    
    
    5,535
    
    
    
    5,300
    
    
    
    6,162
    
    
    
    5,301
    
    
    
    4,701
    
    
    
    4,750Operating income
    
    
    3,095
    
    
    
    4,084
    
    
    
    7,404
    
    
    
    7,159
    
    
    
    6,004
    
    
    
    2,391
    
    
    
    2,593
    
    
    
    1,279Other income (expense), net
    
    
    164
    
    
    
    (22
    )
    
    
    75
    
    
    
    (71
    )
    
    
    178
    
    
    
    (118
    )
    
    
    52
    
    
    
    (87
    )Income before provision
for income taxes
    
    
    3,259
    
    
    
    4,062
    
    
    
    7,479
    
    
    
    7,088
    
    
    
    6,182
    
    
    
    2,273
    
    
    
    2,645
    
    
    
    1,192Provision for income taxes
    
    
    955
    
    
    
    1,597
    
    
    
    3,017
    
    
    
    2,708
    
    
    
    2,190
    
    
    
    884
    
    
    
    1,033
    
    
    
    460Net income
    
    $
    2,304
    
    
    $
    2,465
    
    
    $
    4,462
    
    
    $
    4,380
    
    
    $
    3,992
    
    
    $
    1,389
    
    
    $
    1,612
    
    
    $
    732Net income per share:Basic
    
    $
    0.16
    
    
    $
    0.17
    
    
    $
    0.31
    
    
    $
    0.30
    
    
    $
    0.28
    
    
    $
    0.10
    
    
    $
    0.11
    
    
    $
    0.05Diluted
    
    $
    0.16
    
    
    $
    0.17
    
    
    $
    0.31
    
    
    $
    0.30
    
    
    $
    0.28
    
    
    $
    0.10
    
    
    $
    0.11
    
    
    $
    0.05Number of shares used in per share
computation:Basic
    
    
    14,505
    
    
    
    14,457
    
    
    
    14,423
    
    
    
    14,419
    
    
    
    14,408
    
    
    
    14,405
    
    
    
    14,403
    
    
    
    14,375Diluted
    
    
    14,582
    
    
    
    14,529
    
    
    
    14,508
    
    
    
    14,429
    
    
    
    14,443
    
    
    
    14,467
    
    
    
    14,514
    
    
    
    14,503
 Liquidity and Capital Resources
  24




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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)
    
    $
    17,642
    
    
    $
    1,992
    
    
    $
    10,192
    
    
    $
    3,193
    
    
    $
    2,265Revolving credit facilities
    
    
    5,520
    
    
    
    5,520
    
    
    
    
    
    
    
    
    
    
    
    Defined benefit plan
    
    
    283
    
    
    
    44
    
    
    
    88
    
    
    
    88
    
    
    
    63Operating lease commitments
    
    
    15,044
    
    
    
    1,760
    
    
    
    3,176
    
    
    
    3,034
    
    
    
    7,074Total
    
    $
    38,489
    
    
    $
    9,316
    
    
    $
    13,456
    
    
    $
    6,315
    
    
    $
    9,402
 25




---



##### Table of Contents



Recently Adopted Accounting Pronouncements
 The FASB Accounting Standards Codification and the
Hierarchy of Generally Accepted Accounting Principles
 Subsequent Events
 Disclosures about Derivative
Instruments and Hedging Activities
 Fair Value Measurements
  
    
    Level 1: Quoted prices in active markets for identical assets or liabilities.
    
    Level 2: Observable inputs other than Level 1 prices, such as quoted prices for
similar assets or liabilities; quoted prices in markets that are not active; or other
inputs that are observable or can be corroborated by observable market data for
substantially the full term of the related assets or liabilities.
    
    Level 3: Unobservable inputs that are supported by little or no market activity and
that are significant to the fair value of the assets or liabilities.
 26




---



##### Table of Contents



Effective Date of FASB Statement No.
157
  Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    Total(All amounts are presented in thousands)Assets at Fair Value:Investment in Limoneira Company(1)
    
    $
    24,200
    
    
    
    
    
    
    
    
    
    
    $
    24,200Total assets at fair value
    
    $
    24,200
    
    
    $
    
    
    
    $
    
    
    
    $
    24,200
 
 (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, 2009 and October 31, 2008 equaled $140.00 per
share and $173.00 per share. Unrealized gain
and losses are recognized through other comprehensive
income. Unrealized pre-tax investment holding losses
arising during the year ended October 31, 2009 was $5.7
million. The Fair Value Option for
Financial Assets and Financial Liabilities Including an Amendment of FASB Statement No. 115 Accounting for Certain Investments in Debt and Equity Securities)
 Recently Issued Accounting Standards
  Accounting for Transfers
of Financial Assets  an amendment of FASB Statement No. 140
 Amendments to FASB
Interpretation No. 46(R)
 Determination of the Useful
Life of Intangible Assets
 27




---



##### Table of Contents



Noncontrolling Interests in
Consolidated Financial Statements, an amendment of ARB 51
 Business
Combinations
 
 Item 7A. Quantitative and Qualitative Disclosures About Market Risk
  Expected maturity date October 31,(All amounts in thousands)
    
    2010
    
    2011
    
    2012
    
    2013
    
    2014
    
    Thereafter
    
    Total
    
    Fair ValueAssetsCash and cash equivalents (1)
    
    $
    875
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    875
    
    
    $
    875Accounts receivable (1)
    
    
    22,314
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    22,314
    
    
    
    22,314Advances to suppliers (1)
    
    
    2,329
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,329
    
    
    
    2,329LiabilitiesPayable to growers (1)
    
    $
    396
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    396
    
    
    $
    396Accounts payable (1)
    
    
    2,223
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,223
    
    
    
    2,223Current borrowings pursuant to credit
facilities (1)
    
    
    5,520
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,520
    
    
    
    5,520Long-term borrowings pursuant to credit
facilities (2)
    
    
    
    
    
    
    1,000
    
    
    
    5,450
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,450
    
    
    
    6,580Fixed-rate long-term obligations (3)
    
    
    1,366
    
    
    
    1,370
    
    
    
    1,373
    
    
    
    1,376
    
    
    
    1,380
    
    
    
    1,959
    
    
    
    8,824
    
    
    
    9,843
  (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 2.1%. We
believe that a portfolio of loans with a similar risk profile would currently yield a
return of 1.4%. 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 $178,000.(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 $324,000.   28




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##### Table of Contents



Item 8. Financial Statements and Supplementary Data
 CALAVO GROWERS, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
 October 31,2009
    
    
    2008AssetsCurrent assets:Cash and cash equivalents
    
    $
    875
    
    
    $
    1,509Accounts receivable, net of allowances
of $2,353 (2009) and $2,213 (2008)
    
    
    22,314
    
    
    
    27,717Inventories, net
    
    
    11,731
    
    
    
    14,889Prepaid expenses and other current assets
    
    
    7,191
    
    
    
    4,993Advances to suppliers
    
    
    2,329
    
    
    
    3,089Income taxes receivable
    
    
    2,178
    
    
    
    992Deferred income taxes
    
    
    2,728
    
    
    
    1,826Total current assets
    
    
    49,346
    
    
    
    55,015Property, plant, and equipment, net
    
    
    38,621
    
    
    
    37,709Investment in Limoneira Company
    
    
    24,200
    
    
    
    29,904Investment in unconsolidated entities
    
    
    1,382
    
    
    
    682Goodwill
    
    
    3,591
    
    
    
    3,591Other assets
    
    
    6,076
    
    
    
    7,785$
    123,216
    
    
    $
    134,686Liabilities and shareholders equityCurrent liabilities:Payable to growers
    
    $
    396
    
    
    $
    2,392Trade accounts payable
    
    
    2,223
    
    
    
    4,567Accrued expenses
    
    
    20,032
    
    
    
    16,104Short-term borrowings
    
    
    5,520
    
    
    
    10,130Dividend payable
    
    
    7,252
    
    
    
    5,047Current portion of long-term obligations
    
    
    1,366
    
    
    
    1,362Total current liabilities
    
    
    36,789
    
    
    
    39,602Long-term liabilities:Long-term obligations, less current portion
    
    
    13,908
    
    
    
    25,351Deferred income taxes
    
    
    3,032
    
    
    
    4,216Total long-term liabilities
    
    
    16,940
    
    
    
    29,567Commitments and contingenciesShareholders equity:Common stock ($0.001 par value, 100,000 shares
authorized; 14,505 and 14,419 shares outstanding
at October 31, 2009 and 2008)
    
    
    14
    
    
    
    14Additional paid-in capital
    
    
    39,714
    
    
    
    38,626Accumulated other comprehensive income
    
    
    466
    
    
    
    3,943Retained earnings
    
    
    29,293
    
    
    
    22,934Total shareholders equity
    
    
    69,487
    
    
    
    65,517$
    123,216
    
    
    $
    134,686
 See accompanying notes to consolidated financial statements.
 29




---



##### Table of Contents



CALAVO GROWERS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
 Year Ended October 31,2009
    
    
    2008
    
    
    2007Net sales
    
    $
    344,765
    
    
    $
    361,474
    
    
    $
    302,984Cost of sales
    
    
    300,232
    
    
    
    328,293
    
    
    
    271,212Gross margin
    
    
    44,533
    
    
    
    33,181
    
    
    
    31,772Selling, general and administrative
    
    
    22,791
    
    
    
    20,914
    
    
    
    19,759Operating income
    
    
    21,742
    
    
    
    12,267
    
    
    
    12,013Equity in earnings from unconsolidated entities
    
    
    610
    
    
    
    279
    
    
    
    174Interest income
    
    
    381
    
    
    
    516
    
    
    
    248Interest expense
    
    
    (1,108
    )
    
    
    (1,485
    )
    
    
    (1,346
    )Other income, net
    
    
    263
    
    
    
    715
    
    
    
    512Income before provision for income taxes
    
    
    21,888
    
    
    
    12,292
    
    
    
    11,601Provision for income taxes
    
    
    8,277
    
    
    
    4,567
    
    
    
    4,271Net income
    
    $
    13,611
    
    
    $
    7,725
    
    
    $
    7,330Net income per share:Basic
    
    $
    0.94
    
    
    $
    0.54
    
    
    $
    0.51Diluted
    
    $
    0.94
    
    
    $
    0.53
    
    
    $
    0.51Number of shares used in per share computation:Basic
    
    
    14,451
    
    
    
    14,398
    
    
    
    14,304Diluted
    
    
    14,503
    
    
    
    14,481
    
    
    
    14,435
 See accompanying notes to consolidated financial statements.
 30




---



##### Table of Contents



CALAVO GROWERS, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(in thousands)
 Year endedOctober 31,2009
    
    
    2008
    
    
    2007Net income
    
    $
    13,611
    
    
    $
    7,725
    
    
    $
    7,330Other comprehensive income (loss), before tax:Unrealized holding gains (losses) arising during period
    
    
    (5,704
    )
    
    
    (19,058
    )
    
    
    15,083Income tax benefit (expense) related to items of other
comprehensive income (loss)
    
    
    2,227
    
    
    
    7,337
    
    
    
    (5,712
    )Other comprehensive income (loss), net of tax
    
    
    (3,477
    )
    
    
    (11,721
    )
    
    
    9,371Comprehensive income (loss)
    
    $
    10,134
    
    
    $
    (3,996
    )
    
    $
    16,701
 See accompanying notes to consolidated financial statements.
 31




---



##### 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, 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
    
    
    
    74,003Exercise 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
    
    
    $
    69,487
 See accompanying notes to consolidated financial statements.
 32




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##### Table of Contents



CALAVO GROWERS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
 Year Ended October 31,2009
    
    
    2008
    
    
    2007Cash Flows from Operating Activities:Net income
    
    $
    13,611
    
    
    $
    7,725
    
    
    $
    7,330Adjustments to reconcile net income to net cash provided by
operating activities:Depreciation and amortization
    
    
    3,054
    
    
    
    2,657
    
    
    
    2,391Provision for losses on accounts receivable
    
    
    106
    
    
    
    20
    
    
    
    473Income from unconsolidated entities
    
    
    (610
    )
    
    
    (279
    )
    
    
    (174
    )Interest on deferred consideration
    
    
    152
    
    
    
    75
    
    
    
    Stock compensation expense
    
    
    44
    
    
    
    24
    
    
    
    16Loss on disposal of property, plant, and equipment
    
    
    
    
    
    
    70
    
    
    
    8Deferred income taxes
    
    
    290
    
    
    
    940
    
    
    
    378Effect on cash of changes in operating assets and liabilities:Accounts receivable
    
    
    5,297
    
    
    
    (1,400
    )
    
    
    (2,263
    )Inventories, net
    
    
    3,158
    
    
    
    (5,587
    )
    
    
    2,210Prepaid expenses and other current assets
    
    
    (1,545
    )
    
    
    (79
    )
    
    
    1,023Advances to suppliers
    
    
    598
    
    
    
    (635
    )
    
    
    (886
    )Income taxes receivable
    
    
    (1,072
    )
    
    
    461
    
    
    
    816Other assets
    
    
    (113
    )
    
    
    171
    
    
    
    92Payable to growers
    
    
    (1,996
    )
    
    
    (22
    )
    
    
    (3,920
    )Trade accounts payable and accrued expenses
    
    
    1,023
    
    
    
    1,155
    
    
    
    (2,865
    )Net cash provided by operating activities
    
    
    21,997
    
    
    
    5,296
    
    
    
    4,629Cash Flows from Investing Activities:Acquisitions of property, plant, and equipment
    
    
    (4,149
    )
    
    
    (2,674
    )
    
    
    (2,950
    )Loan to Agricola Belher
    
    
    
    
    
    
    (750
    )
    
    
    (5,000
    )Collections from Agricola Belher
    
    
    507
    
    
    
    1,000
    
    
    
    Acquisition of Hawaiian Sweet and Pride, net of cash acquired
    
    
    (2,348
    )
    
    
    (5,030
    )
    
    
    Net cash used in investing activities
    
    
    (5,990
    )
    
    
    (7,454
    )
    
    
    (7,950
    )Cash Flows from Financing Activities:Dividend paid to shareholders
    
    
    (5,047
    )
    
    
    (5,031
    )
    
    
    (4,573
    )Proceeds (repayments) from (on) line of credit borrowings, net
    
    
    (11,160
    )
    
    
    8,500
    
    
    
    6,826Payments on long-term obligations
    
    
    (1,364
    )
    
    
    (1,389
    )
    
    
    (1,301
    )Proceeds from stock option exercises
    
    
    783
    
    
    
    387
    
    
    
    710Tax benefit of stock option exercises
    
    
    147
    
    
    
    233
    
    
    
    146Proceeds from collection of shareholder notes receivable
    
    
    
    
    
    
    
    
    
    
    2,430Net cash provided by (used in) financing activities
    
    
    (16,641
    )
    
    
    2,700
    
    
    
    4,238Net increase (decrease) in cash and cash equivalents
    
    
    (634
    )
    
    
    542
    
    
    
    917Cash and cash equivalents, beginning of year
    
    
    1,509
    
    
    
    967
    
    
    
    50Cash and cash equivalents, end of year
    
    $
    875
    
    
    $
    1,509
    
    
    $
    967Supplemental Information Cash paid during the year for:Interest
    
    $
    1,195
    
    
    $
    1,455
    
    
    $
    1,310Income taxes
    
    $
    8,803
    
    
    $
    2,504
    
    
    $
    3,100Noncash Investing and Financing Activities:Tax receivable increase related to stock option exercise
    
    $
    261
    
    
    $
    147
    
    
    $
    233Declared dividends payable
    
    $
    7,252
    
    
    $
    5,047
    
    
    $
    5,030Construction in progress included in trade accounts payable and accrued expenses
    
    $
    245
    
    
    $
    259
    
    
    $
    Capital lease obligations
    
    $
    
    
    
    $
    1,125
    
    
    $
    Fixed asset acquired with long term debt
    
    $
    
    
    
    $
    4,000
    
    
    $
    Minimum earnout adjustment related to the acquisition of Hawaiian Sweet and Pride
    
    $
    902
    
    
    $
    
    
    
    $
    Unrealized holding gains (losses)
    
    $
    (5,704
    )
    
    $
    (19,058
    )
    
    $
    15,083
  (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.
 33




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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
   Goodwill and Acquired Intangible Assets
  34




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##### Table of Contents



Long-lived Assets
  Investments
     35




---



##### Table of Contents



Marketable Securities
  Advances to Suppliers
  Accrued Expenses
  Revenue Recognition
  Shipping and Handling
  Promotional Allowances
  Allowance for Accounts Receivable
  Consignment Arrangements
  36




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##### Table of Contents



2009
    
    
    2008
    
    
    2007Sales
    
    $
    44,776
    
    
    $
    49,189
    
    
    $
    22,347Cost of Sales
    
    
    41,941
    
    
    
    45,739
    
    
    
    20,640Gross Margin
    
    $
    2,835
    
    
    $
    3,450
    
    
    $
    1,707
 Advertising Expense
  Other income, net
  Use of Estimates
  Income Taxes
     Basic and Diluted Net Income per Share
  37




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##### Table of Contents



Stock-Based Compensation
    2009
    
    2008
    
    2007Risk-free interest rate
    
    
    2.02
    %
    
    
    2.95
    %
    
    
    3.25
    %Expected volatility
    
    
    67.95
    %
    
    
    28.24
    %
    
    
    22.19
    %Dividend yield
    
    
    4.3
    %
    
    
    2.4
    %
    
    
    3.1
    %Expected life (years)
    
    
    4.0
    
    
    
    4.0
    
    
    
    5.5
    Foreign Currency Translation and Remeasurement
  Fair Value of Financial Instruments
  38




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##### Table of Contents



Derivative Financial Instruments
  Recently Adopted Accounting Pronouncements
 The FASB Accounting Standards Codification and the
Hierarchy of Generally Accepted Accounting Principles
 Subsequent Events
 Fair Value Measurements
  
    
    Level 1: Quoted prices in active markets for identical assets or liabilities.
    
    Level 2: Observable inputs other than Level 1 prices, such as quoted prices for
similar assets or liabilities; quoted prices in markets that are not active; or other
inputs that are observable or can be corroborated by observable market data for
substantially the full term of the related assets or liabilities.
    
    Level 3: Unobservable inputs that are supported by little or no market activity and
that are significant to the fair value of the assets or liabilities.
  Effective Date of FASB Statement No.
157
  39




---



##### Table of Contents



Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    Total(All amounts are presented in thousands)Assets at Fair Value:Investment in Limoneira Company(1)
    
    $
    24,200
    
    
    
    
    
    
    
    
    
    
    $
    24,200Total assets at fair value
    
    $
    24,200
    
    
    $
    
    
    
    $
    
    
    
    $
    24,200
 
 (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, 2009 and October 31, 2008 equaled $140.00 per
share and $173.00 per share. Unrealized gain
and losses are recognized through other comprehensive
income. Unrealized pre-tax investment holding losses
arising during the year ended October 31, 2009 was $5.7
million. The Fair Value Option for
Financial Assets and Financial Liabilities Including an Amendment of FASB Statement No. 115 Accounting for Certain Investments in Debt and Equity Securities)
 Disclosures about Derivative
Instruments and Hedging Activities
 Recently Issued Accounting Standards
  Accounting for Transfers
of Financial Assets  an amendment of FASB Statement No. 140
 Amendments to FASB
Interpretation No. 46(R)
 Noncontrolling Interests in
Consolidated Financial Statements, an amendment of ARB 51
 40




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##### Table of Contents



Business
Combinations
 Determination of the Useful
Life of Intangible Assets
 Comprehensive Income (Loss)
  Reclassifications
  3. Inventories
  October 31,2009
    
    
    2008Fresh fruit
    
    $
    4,495
    
    
    $
    6,019Packing supplies and ingredients
    
    
    2,652
    
    
    
    3,059Finished processed foods
    
    
    4,584
    
    
    
    5,811$
    11,731
    
    
    $
    14,889
    41




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##### Table of Contents



4. Property, Plant, and Equipment
  October 31,2009
    
    
    2008Land
    
    $
    6,923
    
    
    $
    7,179Buildings and improvements
    
    
    17,694
    
    
    
    17,769Leasehold improvements
    
    
    828
    
    
    
    416Equipment
    
    
    45,812
    
    
    
    43,311Information systems  Hardware and software
    
    
    5,209
    
    
    
    5,270Construction in progress
    
    
    648
    
    
    
    1,04977,114
    
    
    
    74,994Less accumulated depreciation and amortization
    
    
    (38,493
    )
    
    
    (37,285
    )$
    38,621
    
    
    $
    37,709
   5. Other Assets
  6. Revolving Credit Facilities
  42




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##### Table of Contents



7. Employee Benefit Plans
    2009
    
    
    2008Change in projected benefit obligation:Projected benefit obligation at beginning of year
    
    $
    279
    
    
    $
    361Interest cost
    
    
    18
    
    
    
    20Actuarial loss/(gain)
    
    
    30
    
    
    
    (56
    )Benefits paid
    
    
    (44
    )
    
    
    (46
    )Projected benefit obligation at end of year (unfunded)
    
    $
    283
    
    
    $
    279
  2009
    
    
    2008Projected benefit obligation
    
    $
    283
    
    
    $
    279Unrecognized net (gain) loss
    
    
    
    
    
    
    Recorded pension liabilities
    
    $
    283
    
    
    $
    279
  2009
    
    2008Discount rate on projected benefit obligation
    
    
    5.25
    %
    
    
    7.00
    %
 8. Commitments and Contingencies
 Commitments and guarantees
  2010
    
    $
    1,7602011
    
    
    1,6122012
    
    
    1,5642013
    
    
    1,5532014
    
    
    1,481Thereafter
    
    
    7,074$
    15,044
   43




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##### Table of Contents



Litigation
 Hacienda Suit
 IRS examination
  9. Related-Party Transactions
    10. Income Taxes
  2009
    
    
    2008
    
    
    2007Current:Federal
    
    $
    6,305
    
    
    $
    2,639
    
    
    $
    2,865State
    
    
    1,522
    
    
    
    615
    
    
    
    817Foreign
    
    
    160
    
    
    
    251
    
    
    
    211Total current
    
    
    7,987
    
    
    
    3,505
    
    
    
    3,893Deferred
    
    
    290
    
    
    
    1,062
    
    
    
    378Total income tax provision
    
    $
    8,277
    
    
    $
    4,567
    
    
    $
    4,271
  44




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##### Table of Contents



2009
    
    2008Allowances for accounts receivable
    
    $
    1,568
    
    
    $
    1,014Inventories
    
    
    283
    
    
    
    305State taxes
    
    
    342
    
    
    
    166Intangible assets
    
    
    73
    
    
    
    11Accrued liabilities
    
    
    462
    
    
    
    330Current deferred income taxes
    
    $
    2,728
    
    
    $
    1,826Property, plant, and equipment
    
    
    (2,732
    )
    
    
    (2,151
    )Intangible assets
    
    
    (178
    )
    
    
    (222
    )Unrealized gain, Limoneira investment
    
    
    (292
    )
    
    
    (2,511
    )Retirement benefits
    
    
    (83
    )
    
    
    362Stock-based compensation
    
    
    250
    
    
    
    286Other
    
    
    3
    
    
    
    20Long-term deferred income taxes
    
    $
    (3,032
    )
    
    $
    (4,216
    )
  2009
    
    2008
    
    2007Federal statutory tax rate
    
    
    35.0
    %
    
    
    35.0
    %
    
    
    35.0
    %State taxes, net of federal effects
    
    
    4.9
    
    
    
    4.3
    
    
    
    5.0Foreign income taxes greater (less) than
U.S.
    
    
    (1.1
    )
    
    
    (1.2
    )
    
    
    (1.3
    )Benefit of lower federal tax brackets
    
    
    
    
    
    
    (0.6
    )
    
    
    (0.7
    )Other
    
    
    (1.0
    )
    
    
    (0.3
    )
    
    
    (1.2
    )37.8
    %
    
    
    37.2
    %
    
    
    36.8
    %
    Balance at November 1, 2007
    
    $
    153Additions for tax positions of prior years
    
    
    109Balance at October 31, 2008
    
    
    262Removal of tax positions of prior years
    
    
    (13
    )Balance at October 31, 2009
    
    $
    249
  11. Segment Information
  45




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##### Table of Contents



Fresh
    
    
    Processedproducts
    
    
    products
    
    
    Total(All amounts are presented in thousands)Year 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
    
    
    $
    33,181Year ended October 31, 2007Net sales
    
    $
    261,325
    
    
    $
    41,659
    
    
    $
    302,984Cost of sales
    
    
    239,864
    
    
    
    31,348
    
    
    
    271,212Gross margin
    
    $
    21,461
    
    
    $
    10,311
    
    
    $
    31,772
   Year ended October 31, 2009
    
    
    Year ended October 31, 2008Fresh
    
    
    Processed
    
    
    
    
    
    
    Fresh
    
    
    Processedproducts
    
    
    products
    
    
    Total
    
    
    products
    
    
    products
    
    
    TotalThird-party sales:Avocados
    
    $
    259,558
    
    
    $
    
    
    
    $
    259,558
    
    
    $
    268,674
    
    
    $
    
    
    
    $
    268,674Tomatoes
    
    
    14,067
    
    
    
    
    
    
    
    14,067
    
    
    
    19,666
    
    
    
    
    
    
    
    19,666Pineapples
    
    
    13,341
    
    
    
    
    
    
    
    13,341
    
    
    
    16,442
    
    
    
    
    
    
    
    16,442Papayas
    
    
    9,118
    
    
    
    
    
    
    
    9,118
    
    
    
    8,392
    
    
    
    
    
    
    
    8,392Other Fresh products
    
    
    4,219
    
    
    
    
    
    
    
    4,219
    
    
    
    2,564
    
    
    
    
    
    
    
    2,564Processed  food service
    
    
    
    
    
    
    36,493
    
    
    
    36,493
    
    
    
    
    
    
    
    38,919
    
    
    
    38,919Processed  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
 Year ended October 31, 2008
    
    
    Year ended October 31, 2007Fresh
    
    
    Processed
    
    
    
    
    
    
    Fresh
    
    
    Processedproducts
    
    
    products
    
    
    Total
    
    
    products
    
    
    products
    
    
    TotalThird-party sales:Avocados
    
    $
    268,674
    
    
    $
    
    
    
    $
    268,674
    
    
    $
    242,197
    
    
    $
    
    
    
    $
    242,197Tomatoes
    
    
    19,666
    
    
    
    
    
    
    
    19,666
    
    
    
    8,837
    
    
    
    
    
    
    
    8,837Pineapples
    
    
    16,442
    
    
    
    
    
    
    
    16,442
    
    
    
    24
    
    
    
    
    
    
    
    24Papayas
    
    
    8,392
    
    
    
    
    
    
    
    8,392
    
    
    
    6,044
    
    
    
    
    
    
    
    6,044Other Fresh products
    
    
    2,564
    
    
    
    
    
    
    
    2,564
    
    
    
    4,242
    
    
    
    
    
    
    
    4,242Processed  food service
    
    
    
    
    
    
    38,919
    
    
    
    38,919
    
    
    
    
    
    
    
    39,006
    
    
    
    39,006Processed  retail and club
    
    
    
    
    
    
    14,634
    
    
    
    14,634
    
    
    
    
    
    
    
    10,777
    
    
    
    10,777Total gross sales
    
    
    315,738
    
    
    
    53,553
    
    
    
    369,291
    
    
    
    261,344
    
    
    
    49,783
    
    
    
    311,127Less sales incentives
    
    
    (71
    )
    
    
    (7,746
    )
    
    
    (7,817
    )
    
    
    (19
    )
    
    
    (8,124
    )
    
    
    (8,143
    )Net sales
    
    $
    315,667
    
    
    $
    45,807
    
    
    $
    361,474
    
    
    $
    261,325
    
    
    $
    41,659
    
    
    $
    302,984
   United States
    
    Mexico
    
    Consolidated2009
    
    $
    22,748
    
    
    $
    15,873
    
    
    $
    38,6212008
    
    $
    21,560
    
    
    $
    16,149
    
    
    $
    37,709
  46




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##### Table of Contents



12. Long-Term Obligations
  2009
    
    
    2008Farm Credit West, PCA, term loan, bearing interest at 5.7%
    
    $
    7,800
    
    
    $
    9,100Farm Credit West, PCA, long-term portion of revolving credit facility (Note 6)
    
    
    6,450
    
    
    
    13,000Capital Lease, bearing interest at 4.3% at October 31, 2009 and 2008 (Note 4)
    
    
    1,024
    
    
    
    1,088Deferred and contingent consideration related to acquisition of Hawaiian Sweet,
deferred consideration bears interest at 3.8% at October 31, 2009 and 2008
(Note 17)
    
    
    
    
    
    
    3,525Other
    
    
    
    
    
    
    15,274
    
    
    
    26,713Less current portion
    
    
    (1,366
    )
    
    
    (1,362
    )$
    13,908
    
    
    $
    25,351
    TotalYear ending October 31:2010
    
    $
    1,3662011
    
    
    2,3702012
    
    
    6,8232013
    
    
    1,3762014
    
    
    1,380Thereafter
    
    
    1,959$
    15,274
 13. Stock-Based Compensation
  The Directors Stock Option Plan
   Weighted-AverageNumber of Shares
    
    Exercise PriceOutstanding at October 31,
2005
    
    
    100
    
    
    $
    6.00Exercised
    
    
    (51
    )
    
    $
    5.04Outstanding at October 31, 2006
    
    
    49
    
    
    $
    7.00Outstanding at October 31, 2007
    
    
    49
    
    
    $
    7.00Exercised
    
    
    (25
    )
    
    $
    7.00Forfeited
    
    
    (24
    )
    
    $
    7.00Outstanding at October 31, 2008
    
    
    
  47




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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
     48




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##### Table of Contents



Weighted-Average
    
    
    Weighted-Average
    
    
    AggregateNumber of Shares
    
    
    Exercise Price
    
    
    Fair-Value
    
    
    Intrinsic ValueOutstanding at October
31, 2006
    
    
    391
    
    
    $
    9.10Granted
    
    
    20
    
    
    $
    10.46
    
    
    $2.06/shareForfeited
    
    
    (78
    )
    
    $
    9.10Outstanding 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
    
    
    $
    10.23
    
    
    
    
    
    
    $
    2,170Exercisable at October 31, 2009
    
    
    222
    
    
    $
    9.41
    
    
    
    
    
    
    $
    1,875
  14. Dividends
  15. Agreements with Tomato Grower
   16. Agreement with Pineapple Grower
  49




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##### Table of Contents



17. Business Acquisitions
         (in thousands)Customer contract/relationships
    
    $
    1,046Trade names
    
    
    92Non-competition agreement
    
    
    64
 18. Subsequent Events
  50




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
       
 51




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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
 52




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
      .
   
 53




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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
  54




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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, 2009 and 2008 and for each
of the three years in the period ended October 31, 2009 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. Badillo63.1
    
    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.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
    
    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 April 9, 2008 (effective date May 1, 2008)
between Farm Credit West, PCA, and Calavo Growers, Inc.1010.9
    
    2005 Stock Incentive Plan Of Calavo Growers, Inc.510.10
    
    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
    
    Business Loan Agreement between Bank of America, N.A. and Calavo
 55




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##### Table of Contents



ExhibitNumber
    
    DescriptionGrowers, Inc., dated October 15, 2007810.15
    
    First Amendment Agreement between Bank of America, N.A. and Calavo
Growers, Inc., dated August 28, 20081210.16
    
    Form of Stock Option Agreement910.17
    
    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, 20081110.18
    
    Amendment No. 2 to Loan Agreement dated as of July 31, 2009 between Calavo Growers, Inc.
and Bank of America, N.A. 1310.19
    
    Amendment to Term Loan Agreement between Farm Credit West, PCA, and Calavo Growers, Inc21.1
    
    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
 
 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 10-Q and
incorporated herein by reference.5
    
    Previously filed on March 21, 2005 as an exhibit to the Registrants Definitive Proxy
Statement on Form DEF14A and incorporated herein by reference.6
    
    Previously filed on January 23, 2004 as an exhibit to the Registrants Report on Form 10-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 October 19, 2007 as an exhibit to the Registrants Report on Form 8-K and incorporated herein by reference.9
    
    Previously filed on September 11, 2006 as an exhibit to the Registrants Report on Form 10-Q and incorporated herein by reference.10
    
    Previously filed on May 8, 2008 as an exhibit to the Registrants Report on Form 8-K and incorporated herein by reference.11
    
    Previously filed on May 29, 2008 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 August 6, 2009 as an exhibit to the Registrants Report on Form 8-K and incorporated herein by reference. (b)
    
    ExhibitsSee subsection (a) (3) above.(c)
    
    Financial Statement SchedulesSee subsection (a) (1) and (2) above.
 56




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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
    
    Chairman of the Board of Directors,Lecil E. Cole
    
    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
    
    Corporate ControllerJames E. Snyder
    
    (Principal Accounting Officer)/s/ Donald M. Sanders
    
    DirectorDonald M. Sanders/s/ Fred J. Ferrazzano
    
    DirectorFred J. Ferrazzano/s/ John M. Hunt
    
    DirectorJohn M. Hunt/s/ George H. Barnes
    
    DirectorGeorge H. Barnes/s/ J. Link Leavens
    
    DirectorJ. Link Leavens/s/ Alva V. Snider
    
    DirectorAlva V. Snider/s/ Michael D. Hause
    
    DirectorMichael D. Hause/s/ Dorcas H. McFarlane
    
    DirectorDorcas H. McFarlane/s/ Egidio Carbone, Jr
    
    DirectorEgidio Carbone, Jr/s/ Steven W. Hollister
    
    DirectorSteven W. Hollister/s/ Harold Edwards
    
    DirectorHarold Edwards/s/ Scott Van Der Kar
    
    DirectorScott Van Der Kar
 57




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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
    
    
    2007
    
    
    
    1,345
    
    
    
    6,449
    
    
    
    6,465
    
    
    
    1,3292008
    
    
    
    1,329
    
    
    
    7,065
    
    
    
    7,163
    
    
    
    1,2312009
    
    
    
    1,231
    
    
    
    6,080
    
    
    
    6,058
    
    
    
    1,253Allowance for doubtful accounts
    
    
    2007
    
    
    
    488
    
    
    
    473
    
    
    
    19
    
    
    
    9422008
    
    
    
    942
    
    
    
    93
    
    
    
    53
    
    
    
    9822009
    
    
    
    982
    
    
    
    122
    
    
    
    4
    
    
    
    1,100
 
 (1)
    
    Charged to net sales (customer deductions) or costs and expenses (doubtful accounts).(2)
    
    Customer deductions taken or write off of accounts receivables. 58




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##### Table of Contents



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. Badillo63.1
    
    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.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
    
    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 April 9, 2008 (effective date May 1, 2008)
between Farm Credit West, PCA, and Calavo Growers, Inc.1010.9
    
    2005 Stock Incentive Plan Of Calavo Growers, Inc.510.10
    
    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
    
    Business Loan Agreement between Bank of America, N.A. and Calavo
Growers, Inc., dated October 15, 2007810.15
    
    First Amendment Agreement between Bank of America, N.A. and Calavo
Growers, Inc., dated August 28, 20081210.16
    
    Form of Stock Option Agreement910.17
    
    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, 20081110.18
    
    Amendment No. 2 to Loan Agreement dated as of July 31, 2009 between Calavo Growers, Inc.
and Bank of America, N.A. 1310.19
    
    Amendment to Term Loan Agreement between Farm Credit West, PCA, and Calavo Growers, Inc21.1
    
    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
 59




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##### Table of Contents



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 10-Q and
incorporated herein by reference.5
    
    Previously filed on March 21, 2005 as an exhibit to the Registrants Definitive Proxy
Statement on Form DEF14A and incorporated herein by reference.6
    
    Previously filed on January 23, 2004 as an exhibit to the Registrants Report on Form 10-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 October 19, 2007 as an exhibit to the Registrants Report on Form 8-K and incorporated herein by reference.9
    
    Previously filed on September 11, 2006 as an exhibit to the Registrants Report on Form 10-Q and incorporated herein by reference.10
    
    Previously filed on May 8, 2008 as an exhibit to the Registrants Report on Form 8-K and incorporated herein by reference.11
    
    Previously filed on May 29, 2008 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 August 6, 2009 as an exhibit to the Registrants Report on Form 8-K and incorporated herein by reference. 60