Santa Paula-based Calavo Growers reported record first quarter revenues of $226.6 million, up from $204.6 million a year ago, but net income fell to $5.2 million from $6.3 million a year ago.
The revenue growth was fueled by the performance of Calavo’s fruit and vegetables company Renaissance Food Group, which showed a 29 percent rise in revenues and gross margin increases of 60 percent over the year prior during the three-month period ending Jan. 31.
“RFG’s revenue growth rate accelerated in the initial period to 29 percent year-over-year, outstripping the mid-teen percentage gains we experienced throughout 2016,” CEO Lee Cole said in the earnings release. “With its 260 basis point year-over-year improvement in gross margin, RFG’s stellar performance offset headwinds encountered during the period in our Fresh business segment.”
Operating income in the fiscal 2017 first quarter was $8.1 million, after nearly $1.2 million in non-recurring operating expenses that included changes among the company’s senior management team. This is down from $10.1 million during the first fiscal quarter 2016.
The growth in Renaissance helped compensate for the rough start to the inconsistent avocado industry supply in 2016. Its tomato program was also hit by strong industry pricing in the corresponding period last year.
“Calavo’s multi-platform business model remains one of the key elements of our consistent growth in annual revenue and earnings,” Cole said.
The company had around $7.6 million in cash and cash equivalents and $124.4 million in liabilities as of Jan. 31. Earnings per basic and diluted share during the quarter fell 7 cents over the same quarter in 2016 to 30 cents.
Cole reaffirmed Calavo’s outlook for a 10 percent or higher increase in revenues during the 2017 fiscal year and record earnings per share.