Calavo Growers Delays Release of its Fourth Quarter and Fiscal Year 2023 Financial Results
Calavo Growers, Inc. (CVGW) announced a filing for an extension of its Annual Report on Form 10-K with the SEC due to certain matters identified during the internal audit process. The company established a Special Committee to evaluate and investigate these matters, particularly related to its operations in Mexico. The company expects to report a decrease in net sales of approximately 18% for the year ended October 31, 2023, compared to the previous year.
Negative
Net sales decreased approximately 18% to $972 million for the year ended October 31, 2023, compared to the year ended October 31, 2022.
The delay in filing the Form 10-K by Calavo Growers, Inc. signals potential issues in financial reporting or internal controls, which can raise concerns among investors regarding the reliability of financial statements. The investigation into the company's operations in Mexico and the subsequent need for additional time to prepare financial statement entries and disclosures, could imply material weaknesses in internal controls or possible restatements. The market typically reacts negatively to such uncertainties, which can lead to increased volatility in the company's stock price.
Moreover, the preliminary financial results indicating an 18% decrease in net sales year-over-year could be a red flag for investors, potentially reflecting operational challenges or a decline in market demand. The gross profit margin's modest decline compared to the first nine months also suggests profitability pressures. These factors combined could lead to a reassessment of the company's valuation by investors.
The establishment of a Special Committee and the involvement of outside counsel indicate that the issues identified are taken seriously and could have legal implications. The nature of these matters, particularly those requiring further investigation in Mexico, could relate to compliance with regulations such as the Foreign Corrupt Practices Act (FCPA) or other local laws. While the company states that previously issued financial statements are not affected, the outcome of the investigation could still lead to legal consequences or fines if any violations are uncovered.
The information provided by Calavo Growers, Inc. regarding its expected decrease in net sales and a lower gross profit margin could reflect broader market trends within the agricultural sector or specific challenges faced by the company in its operational efficiency or competitive positioning. It is essential to analyze how these figures compare with industry averages and the performance of peers. If Calavo's results deviate significantly from its competitors, it may indicate company-specific issues rather than industry-wide trends, affecting its market share and competitive edge.
01/16/2024 - 04:06 PM
SANTA PAULA, Calif., Jan. 16, 2024 (GLOBE NEWSWIRE) -- Calavo Growers, Inc. (Nasdaq: CVGW), today announced that it will file a Form 12b-25, Notification of Late Filing, with the U.S. Securities and Exchange Commission with regard to its Annual Report on Form 10-K (the “Form 10-K”) for the fiscal year ended October 31, 2023. Form 12b-25 will allow the Company an automatic extension of fifteen additional calendar days to file the Form 10-K, which was due on January 16, 2024. The Company plans to issue a press release announcing its earnings on the same day the Form 10-K is filed.
The Company’s internal audit process identified to the Audit Committee of the Board of Directors certain matters that the Board of Directors determined after fiscal year end merited enhanced evaluation. The Board of Directors promptly established a Special Committee of the Board of Directors (the “Special Committee”) to evaluate these matters, and if it deemed appropriate, commence an investigation. The Special Committee, with the assistance of outside counsel, commenced an internal investigation into these matters. As part of this internal investigation, the Special Committee determined that certain matters relating to the Company’s operations in Mexico merited further investigation in connection with the completion of the Company’s financial statements for the year ended October 31, 2023. The Special Committee is in the process of completing the first stage of this further investigation, which stage is designed to enable the Company to properly account for and disclose the matters subject to the further investigation. A second stage is intended to address remediation for issues discovered in the first stage of the further investigation. The Company needs further time given the first stage of the further investigation to prepare appropriate financial statement entries and disclosures for the Form 10-K. In addition, the Company requires additional time to complete its assessment of the effectiveness of its disclosure controls and procedures and any impact of these matters on its internal control over financial reporting.
The Company does not believe that any of the matters under investigation affect any previously issued financial statements. The Company is working diligently to complete this stage of the further investigation and the appropriate financial statement entries and disclosures so that the Form 10-K can be filed as soon as possible. The Company anticipates that it will be in a position to file the Form 10-K on or before the fifteenth calendar day following the required filing date as prescribed in SEC Rule 12b-25.
Preliminary Financial Results
The Company expects to report in the Form 10-K that net sales decreased approximately 18% to $972 million for the year ended October 31, 2023, compared to the year ended October 31, 2022, with gross profit as a percentage of revenue for full year fiscal 2023 modestly lower than the first nine-month period of fiscal 2023.
About Calavo Growers, Inc. The Family of Fresh™ at calavo.com
Safe Harbor Statement
Certain statements contained in this press release include “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include words such as “believe,” “expect,” “designed to,” “anticipate,” “intend,” and similar expressions. These statements are not guarantees of results, and our actual results could differ materially from those expressed in the forward-looking statements due to a variety of important factors, both positive and negative, including that additional issues or facts may be identified during the Special Committee’s further investigation that could cause material impacts on the Company’s historical or anticipated financial results or timing of the filing of the Company’s Form 10-K. The Company therefore cautions you against relying on these forward-looking statements. All forward-looking statements attributable to the Company or persons acting on the Company’s behalf are expressly qualified in their entirety by the foregoing cautionary statements. All such statements speak only as of the date made, and, except as required by law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
Why did Calavo Growers, Inc. file a Form 12b-25 with the SEC?
Calavo Growers, Inc. filed a Form 12b-25 to request an automatic extension of fifteen additional calendar days to file its Annual Report on Form 10-K.
What did the internal audit process identify?
The internal audit process identified certain matters that the Board of Directors determined merited enhanced evaluation, leading to the establishment of a Special Committee to evaluate and investigate these matters.
What is the expected decrease in net sales for the year ended October 31, 2023?
The company expects to report a decrease in net sales of approximately 18% to $972 million for the year ended October 31, 2023, compared to the year ended October 31, 2022.
